After years of losses, funds focused on gold and gold miners are up sharply in 2016. (AP Photo/Nick Ut, file)
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After a brief post-election rally, gold ended last week down 5.2 per cent at $1,234.50 a troy ounce as the dollar rallied, and investors ditched traditional haven assets.The direction of future gold prices greatly depends on whether that investor flow stabilises – and, if not, whether demand from India and China, the two largest consumers, could help support the price.Gold is still up 16 per cent this year in dollar terms, and 36 per cent measured in pounds. Demand fell by 22 per cent in China in the third quarter and 28 per cent in India, according to the World Gold Council.Still, the two countries are likely to buy if the price of gold continues to dip, according to Mr Hewitt.James Butterfill, head of research at ETF Securities in London, was convinced that ETF demand is relatively stable.The company has seen $4.3bn of inflows into gold products this year, with only about $110,000 going into products betting that the gold price will fall, he said.
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