With the 'paper' price of gold are a somewhat unprecedented barrage of selling currently (down 9 of the last 11 days) to 4-month lows, one could be forgiven for thinking that demand for the precious metal is dropping. However, as almost every nation in the world (ex US) is devaluing their currency, The World Gold Council reports that physical gold demand has risen dramatically with US gold Eagle coin sales at the highest levels since the financial crisis.

'Physical' Demand is exploding...

As 'Paper' prices collapse...

And then spike off 2015 lows...

As the latest report from The World Gold Council shows, gold buyers jumped on the new low prices...

"US retail investment demand jumped to 32.7 tonnes, generating growth of more than 200% year-on-year," " This signaled both a level of interest in gold investment not seen since the global financial crisis, and a level of price awareness on a par with that of Indian and Chinese retail investors. Nowhere was this more clearly demonstrated than in the US, where the US Mint reported rocketing sales of gold Eagle coins." ... "Demand for was the highest for more than five years: in volume terms, sales hit 397,000 oz.," "Demand for newly minted coins surged across all key product lines: sales across all denominations were many multiples of their long-term average levels. Secondary market activity was correspondingly weak as profit-taking slumped in favor of bargain hunting."

Finally - who is buying? It's not just those crazy retail gold bug doomers... Central Banks continue to back up the truck, taking advantage of the 'low' prices... Gold as a reserve asset remains firmly on the radar

Central banks continue to build their holdings of gold, adding 175t to official reserves. Purchases by central banks and other official sector institutions almost equalled the Q3 2014 record of 179.5t as gold’s diversification benefits were increasingly recognised and sought. A couple of new countries joined the ranks of repeat buyers, the most significant of those being China. The People’s Bank of China (PBoC) confirmed in July that its gold reserves had expanded by over 50% since its last announcement in 2009. At 1,658t, that put China at number six in the global rankings. Subsequently, the PBoC has begun regularly to report changes to its gold holdings and has confirmed an additional 50.1t of purchases between July and September. And in another small but significant step, the central bank of the United Arab Emirates (UAE) confirmed that, between April and September it added 5t of gold to its reserve asset portfolio, having held none since 2003. The result is that the UAE makes it into the top 100 holders of gold and expands the geographical spread of central bank buyers.

Q3 saw continued buying by regular names, primarily concentrated in the CIS region. Selling was again limited and sporadic.

So it makes all the sense in the world that gold 'prices' are testing the lowest levels since October 2009...

Charts: Bloomberg and The World Gold Council