Unlike a year ago when the big ETF buyers were in the U.S., this time it's the Germans. They are buying XETRA-Gold, the exchange-traded fund backed by bullion. Investors poured almost US$ 906MM into this ETF this month, the biggest inflow since inception in 2007. As of February 13, holdings were estimated at 157.9 metric tons (attachment 1).
The motivations of the buying are political. The uncertainty about BREXIT, U.S. politics, and elections in Holland (March) and France (1st round April, second round May).
The latest buying spree by them was done between US$ 1,220 per ounce and US$ 1,250 per ounce. Attachment 2 shows the sharp and long decline of gold from 2012 with a low in January 2016 round US$ 1,040 per ounce. After that a rally occurred till July 2016 to around US 1,370 and subsequently gold fell back to around US$ 1,125 per ounce. The current rally is still considered to be against the major trend, which is down. A breakout over US$ 1,350 per ounce would signal the end of the bear market. Gold is not out of the woods yet.