A recent academic paper investigated the relationship between gold, silver, platinum, and palladium prices and demand from precious metals exchange-traded products.
The empirical findings of this study suggest that there is a strong statistical significant positive contemporaneous relationship between the inflows and outflows in the precious metals ETPs and the returns of the underlying metals.
Who knew? Supply and demand causes the prices of precious metals to go up and down. Duh.
I am always amazed when academics “discover” what practitioners have known for generations. Academia does generate some real insights in finance, but this does not seem to be one of them.
