PURCHASES of gold-backed exchange traded funds (ETFs) surged $23bn in the first quarter – the highest quarterly increase in absolute dollar terms – and taking total inflows in the past year to some 659 tons, said the World Gold Council.
This is the highest 12-month accumulation on a rolling annual basis since the financial crisis, with assets under management growing 57% over the same period, the council said. First quarter tonnage inflow totalled 298 tons.
Holdings were at new all-time highs of 3,185 tons in March, a net inflow of $8.1bn for the quarter, the council said.
The gold price remained volatile, however. In US dollar terms it was flat in the first quarter but at new all-time highs in other currencies. The rand gold price was at R968,511 per kilogram – easily an all-time high. The gold price was last at $1,653.07 per ounce which is close to testing a three-year high of $1,674/oz recorded on March 6.
Commenting on gold price strength in non-US denominations, the council said: “This highlights a continued trend of growth in gold ETFs outside of the US over the past few years; a trend underscored by European funds seeing the largest absolute inflows and Asia and other regions registering the largest percentage growth during the month.”
“We believe the long-term reasons for holding gold have, if anything, been strengthened by current developments,” said Ole Hansen, head of commodity strategy at Saxo Bank. He was referring to liquidations of gold several weeks ago when the true scale of the COVID-19 pandemic took hold, sending investors crashing out of all assets in favour of cash.
