Gold-backed exchange-traded funds (ETFs) recorded a seventh consecutive month of inflows, adding 104 tons in June – equivalent to $5.6 billion or 2.7 percent of assets under management (AUM).
Global holdings are now at an all-time high of 3,621 tons, with North American funds dominating activity in June, added 83 tons ($4.6 billion, 4.3 percent AUM), which account for 80 percent of global net inflows, according to data from the World Gold Council.
This brings the global net inflow for the first half of the year to 734 tons, or 25 percent in tonnage terms, and equivalent to $40 billion – a level significantly above the highest level of annual inflows in terms of tonnage and US dollar value. The first-half inflows are also higher than the multi-decade record level of central bank purchases seen in 2018 and 2019, the industry body said in its monthly gold ETFs commentary and data, released today.
The price of gold in US dollars also continued to extend its year-to-date gains in June, rising 2 percent to finish at $1,768.1/oz – its highest level since October 2012, and about 17 percent up from the start of the year.
Supportive Environment
«The economic and geopolitical environment remains supportive for gold investment, with most of the existing gold demand drivers still relevant,» Krishan Gopaul, from the WGC's market intelligence group, said about the continued strong demand.
The opportunity cost of holding gold remains gold is low, with low or negative interest rates, as well as high levels of risk and uncertainty brought about by the Covid-19 pandemic, the report noted.
In a research note earlier this week, HSBC said the near-term driver for gold is US Treasury yields, but Covid-19 concerns, monetary and fiscal stimulus «will likely put a near-term floor on gold prices.»
