Uncertainty in stock markets leads to record inflows in gold ETFs

Gold-backed ETFs saw strong inflows worldwide in February due to the high volatility of the markets. The funds’ gold holdings rose 84.5 tons worth $ 4.9 billion net last month to a new all-time high of 3,033 tons, according to the World Gold Council (WGC).As the price of gold rose nearly 2% over the same period, assets under management (AUM) rose 4.4% on a dollar basis, surpassing the record high of September 2012, it said. At that time, the gold price was again 10% above the current level.

This shows two trends, according to the WGC: the growth of gold ETFs outside the US and that US investors have not yet increased the gold share of their portfolios as much as in 2012.The sharp rise in market uncertainty due to the spread of the corona virus and its consequences for the global economy led to strong inflows in all regions, led by North America.

There were inflows of 42 tons ($ 2.3 billion, 2.9% AUM), while gold funds in Europe recorded 33 tons ($ 2 billion; 2.8% AUM). In Asia, especially China, there were strong inflows into gold ETFs in February. The increase here was 8.7 tons.