2020’s Q1 Has The Record-Breaking Gold ETF Purchases Due To Coronavirus

By Kapil Gauhar

Global gold-backed ETFs had $23 billion, or 298 tons of net inflows in the first quarter of 2020 – the most noteworthy quarterly sum ever and the biggest tonnage increases since 2016, the World Gold Council said in its most recent report.

During the previous year, gold ETFs included 659 tons, the most noteworthy on a moving yearly premise since the financial crisis, with AUM becoming 57% over the same period.

For the long stretch of March, gold ETFs included 151 tons for a net inflow of $8.1 billion, boosting holdings to another unsurpassed high of 3,185 tons.

Trading volumes and AUM arrived at record highs as gold volatility expanded to levels last observed during the financial crisis, yet gold price performance was generally level in USD for the month, the Council revealed.

While vulnerability around the shot- as well as long-term financial impacts of COVID-19 continue driving sharp volatility across numerous assets, empowering inflows into safe-havens like US treasuries and gold, gold ETFs recorded in all districts experienced strong inflows during the month.

The WGC said –

“Gold prices denominated in many other currencies, however, continued to reach all-time highs although the price in US dollars remained 15% below its 2011 high. This highlights a continued trend of growth in gold ETFs outside of the US over the past few years.”

European funds drove provincial inflows, developing by 84 tons, while North American funds included 57 tons. Asian funds, principally in China, additionally completed the month with strong inflows, including 4.9 tons.

Looking forward, WGC analysts said ongoing drivers of venture demand are required to proceed, across the board market vulnerability and the improved open door cost of holding gold as yields move lower.

WGC stated –

“With the Fed taking interest rates to zero for the foreseeable future, gold could do well as it tends to outperform during easing cycles. Additionally, multi-trillion dollar fiscal stimulus policies to combat the economic impact of COVID-19 could prove inflationary – a development that could support gold prices in the long run.”