Gold held by ETFs surges in third quarter as investors look to cover monetary risk

GOLD held by exchange traded funds (ETFs) surged during the third quarter as investors utilised the metal’s traditional safe haven status, according to the World Gold Council. The council added that this trend was likely to be sustained through to year-end.

Demand for gold from retail and institutional investors more than doubled compared to the same quarter last year, reaching 408.6 tons. Of this, almost two-thirds – about 258 tons – was attributable to buying by ETFs, the council said. The balance of about 150 tons came from investors buying gold bars and coins directly.

Investors flock to gold when they are looking for safe places to stash cash amid concerns over slowing global growth and looser monetary policy.

“Demand this quarter nudged higher as the continued surge into ETFs more than compensated for weaker demand elsewhere,” said Alistair Hewitt, head of market intelligence at the council.

“Investors have increased their exposure to gold in response to low interest rates, negative yields, and geopolitical and economic uncertainty,” he said. Gold-backed ETF volumes hit an all-time high in September.

“But those same global trends, notably an economic slowdown in India and China coupled with the sharp increase in the gold price, mean many consumers have held off buying gold jewellery,” said Hewitt.

“Looking forward, we expect to see many of these trends continue into the end of the year as monetary policy is likely to become even more accommodative in the US and global political issues continue to weigh on sentiment.”



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