Gold broke the $1,000 per ounce level in London on Tuesday 8th September, as investor demand for gold has continued to surge. ….
Gold holdings of ETF Securities’ gold ETCs hit an all time high of 8 million ounces ($8bn) at close of trade Tuesday, as the gold price edged through the psychologically important $1,000 per ounce mark.
Buying of gold ETCs has been gaining momentum over the past month with the holdings of ETFS Physical Gold (PHAU), Gold Bullion Securities: (GBS) and GOLD, rising by 657,724 ounces ($658mn), the largest monthly increase since January 2009. Inflows in just the past month are equivalent to 33% of total net inflows this year, highlighting the magnitude of the recent surge.
The rise in gold ETC inflows has come at a time when investors’ appear to be becoming increasingly wary of the magnitude and duration of the rally in risk assets this year. Gold is often viewed as a safe haven asset, with gold ETCs often seeing strong inflows when investors become concerned about possible financial and economic turbulence, as we saw last year following the Lehman bankruptcy and early this year with the commencement of “quantitative easing” policies from major central banks.
Due to the success and increasing demand for physical gold exchange traded products, ETF Securities recently launched Japan’s first ever commodity ETF precious metals platform on the Tokyo Stock Exchange on the 24th August 2009, allowing investors to gain exposure to physical precious metals including ETFS Physical Gold. The other products cover, silver, platinum, palladium and a precious metals basket.
Nicholas Brooks, Head of Research & Investment Strategy at ETF Securities commented:
“The surge of the gold price through the psychologically important $1000 per ounce level has coincided with our gold ETC holdings reaching an all time high of 8mn ounces. Demand for our gold ETCs has been rising rapidly since the beginning of August, with holdings up the equivalent of 658mn ounces ($658mn), the largest monthly increase since January 2009. As gold is often viewed as a safe haven asset, the sharp rise in gold demand over the past month appears to be related to investors’ attempting to hedge against possible financial market turbulence following the extremely strong rally in risk assets over the past few months.”
Source:ETFWorld.co.uk – ETFSecurities
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