'Physical Gold demand steadies as prices rise above $1,700/oz'

NEW YORK (Scrap Monster): Physical gold demand has remained steady even as gold moved above $1,700 an ounce during a recent rally, according to the Standard Bank.

Standard has a Gold Physical Flow Index, which tracks buying and selling of gold, with a positive number indicating net buying and a negative indicating net selling.

“When gold's rally began in mid-August, physical buying initially dissipated, Standard says. But as the market kept rallying, the GFPI held up. Two factors appear to be at play here," Standard said.

"First, as we have seen in the past, after an initial slowdown in buying after a price rise, the physical market adjusts to the higher level and resumes buying. However, it must be noted that this time the adjustment appears to have been fairly rapid. This brings us to the second factor. This adjustment has been further facilitated by the need for physical gold as we enter the Indian wedding season," the bank concluded.