(Bloomberg) -- Gold investment has risen over the past year, driven by central bank purchases, with overall implied allocations by non-bank investors at the highest since end-2012, JPMorgan Chase & Co. analysts including Nikolaos Panigirtzoglou said in a note. 

• The implied allocation to gold has been rising since the pandemic and looks rather high by historical standards
  • “One needs to assume a structural increase in central bank demand beyond historical norms (due to fears of sanctions or general diversification away from G7 government bonds) to be bullish on gold”
  • But that’s being challenged at the moment as there’s evidence of a normalization of central bank gold purchases in Q2 2023 and it remains to be seen if this is temporary or not
• There’s little doubt the pace of central bank buying is now most important factor for gauging the future trajectory of gold prices
  • It’s taken over from ETF flows, which were the most important before the pandemic
• NOTE: Non-bank investors includes private investors and central banks
• READ: Central Banks’ Gold Demand Falls Again on Turkey’s Massive Sales
• READ: Investors Say They’ll Stick With Gold as Fed Cycle Nears End (2)

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