A few days ago, the World Gold Council published data on Gold ETF holdings for June, Commerzbank’s commodity analyst Carsten Fritsch notes.
Impact of ETF purchases on prices has waned
“According to this, there was a monthly increase of 75 tons. In the second quarter, net purchases by ETF investors amounted to 170 tons, and in the first half of the year to 397 tons. According to the WGC, these were the strongest ETF inflows in a first half in five years. At that time, the coronavirus pandemic and the subsequent massive easing of monetary policy by central banks were the triggers.”
“This time, it was likely the uncertainty caused by US President Trump’s erratic tariff policy. The majority of ETF inflows occurred in February, March, and April, when uncertainty surrounding tariffs was at its peak. More than half of ETF inflows in the first half of the year were attributable to Gold ETFs in the US.”
“Strong ETF purchases thus contributed significantly to the sharp rise in the Gold price to a record high in April. Recently, however, the impact of ETF purchases on prices has waned. Although the Gold price rose significantly in the first half of June, it remained below its record high and then fell again, resulting in only a marginal price increase at the end of the month.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
