When gold prices plunged in 2013, the main reason was a mass liquidation of the gold being held in exchange-traded funds, which shed a staggering 880 tonnes of the metal.

ETF buying was very limited in 2014 and 2015 as investors had minimal interest in the gold sector. But it has come back in a big way so far in 2016, with ETF gold holdings rising by more than 270 tonnes. That works out to about nine per cent of annual gold mine production.

The rebound in ETF demand has very positive implications for the sector, according to analysts at TD Securities.

“This strong investor and physical demand for gold has been a key driver in sustaining this rally (in gold prices), and an indication that investor demand has turned positive for gold,” they said in a note.

The analysts noted this is the first “sustained” period of inflows into gold ETFs since they peaked in late 2012. And they pointed out that gold demand outside of the ETF has been very strong as well.

“Physical demand has been strong to start the year in India and China, and demand for gold eagle coins in the U.S. was up 209 per cent over the first two months year-over-year,” they said, citing Metals Focus.