In June, the gold price finally broke above the $1,400 level after five long years. So, who was responsible for pushing the gold price to a new high since 2013? Well, if we look at the data, it most certainly wasn’t the physical gold investor. And, according to several dealers I spoke with, physical gold retail investors took advantage of the $1,400+ price to sell metal rather than be big buyers… which I found quite interesting.

However, if we understand the psyche of the smaller retail investor, it’s not all that surprising. The retail physical gold investor tends to buy more metal when there is fear, financial instability, or extreme price volatility in the markets. So, if it wasn’t the physical gold investor responsible for the $1,400+ price move… then who was? It was the Paper Gold Buyer.

Thus, in a strange and odd sort of way, we can thank the Paper Gold Buyer for pushing gold above the critical $1,360 level that I wrote about in my article, FINALLY… GOLD BREAKS OUT THROUGH KEY 5-YEAR RESISTANCE LEVEL. Here we can see gold finally pushing through the key $1,360 level in this monthly chart:

As I mentioned in several articles, Traders, Hedge Funds, and Institutions look at crucial support and resistance levels, whether or not precious metals investors follow Technical Analysis. So, when gold finally broke above that $1,360 level, it shut up all the way to $1,440 before correcting. While the Technical Analysis pointed to a breakout above $1,360, it was the announcement by the Fed of possible rate reductions that caused Traders, Hedge Funds and Institutions to push gold to five-year highs.

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