An astronomical amount by any standards. Interestingly, only a small fraction of this monumental amount has been allocated to gold investments. Here below is the record of gold investments since 1980. To be sure a brief history of gold investment demand will indubitably put our analysis into sharp perspective.
In the late 1970s the price of gold soared to the then all-time high of $800 per ounce fueled by runaway inflation of that period that propelled gold investments skyward.
Source: Moore Research Center Inc.
The price of gold soared from about $160 in 1976 to a little over $800 in early 1980. It is imperative to note that in 1980, gold investments as a percentage of Total Global Financial Assets had reached 5.0%. Hoverer, gold investment demand then began to wane for many of the following years until the new century began in 2000…when the price of gold finally bottomed. In that year gold investments as a percentage of Global Financial Assets had also bottomed at 0.19%.
Chart Source: SRSrocco Report
By 2001 gold investments as a percentage of Global Financial Assets began a slow methodical climb until the 2011-2012 period…when gold again make an all-time peak at over $1,900. Understandably, the price of gold then slowly began to decline in concert with the diminishing gold investments as a percentage of Global Financial Assets (which dropped from 0.85% to last year’s 0.58%.
Think about it: Gold investment as a percentage of Global Financial Assets were nearly nine times greater in 1980 than it is today. To be sure the implications and ramifications of the above are mine-boggling. Here is another chart focus on how minuscule recent gold investment is as a percentage of Global Financial Assets: