Despite Lower Gold Prices, Fresh Gold Ounces Are Flowing Into GLD Vaults

As a rule, Western investors behave irrationally - when the prices of any asset go down the demand on that asset also goes down. 

During the last bear market in gold, these investors were liquidating their gold holdings at lower prices. For example, the biggest publicly traded gold fund, GLD, reported an ouflow of 719 tons of gold between December 2012 and December 2015 (a decrease of 53.2%). 

However, these days the investors behave differently. Let me look at the April - May 2016 GLD data:

               source: GLD data and Simple Digressions

The chart shows gold flows, reported by GLD, starting from April 1, 2016. 

The strange thing is that in May, despite lower gold prices, GLD reported only inflows into its vaults (there was no single gold outflow in that period). In other words, investors were taking advantage of lower gold prices to increase their long positions. 

It looks like they behave like the Chinese people - the lower the price the higher the demand.

In my opinion, it is a bullish pattern for gold.