According to the World Gold Council, the price of an ounce of gold in 2009 averaged $972.32 while the price of an ounce in 2010 averaged $1,224.52. Athough 2010 was the second-best year for exchange-traded products backed by gold, the net inflow fell 41% from 2009. Inflows into ETFs and other exchange-traded products have declined in 2011 as well, and so far this year gold has fallen by 6.3%. SPDR Gold Trust, the largest gold-backed ETF, has experienced a drop of nearly 20 metric tons from its December 31 holdings, according to its web site.
Last year over the first nine months of 2010, industrial, technological, and dental demands for gold increased 19%. At the same time, consumer electronics consumed 26% more gold. Currency appreciation compared to the dollar played a role in 2010 also. Additionally, in India and China, gold is valued both as jewelry and as a store of wealth. At the World Gold Council, analysts said indications are that ETFs are now a convenient and cost-effective means to access gold for investors in multiple markets. They believe low volatility could provide a foundation for a well-diversified portfolio.
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