Thanks to Donald Trump’s erratic behaviour sparking trade wars and other disputes, gold has surged this year, climbing to well over $US1,500 an ounce with Comex futures prices up more than 17% this year and over 26% in the past 12 months.
Strong buying by central banks in Europe, Russia, China, and some developing countries has added to the usual safe-haven demand for the metal, but as the World Gold Council again confirmed on Tuesday, the surge has also been helped by gold-backed Exchange Traded Funds or ETFs.
In fact, the World Gold Council (WGC) said that gold holdings of gold-backed ETFs reached their highest levels of all-time in the month of September, adding 75.2 tonnes in September to a total of 2,808 tonnes.
A combination of the Trump generated volatility with China, Iran, and the Middle East, Europe and North Korea, the easy money monetary policy of central banks, the looming Brexit deadline and rising tensions over impeachment in Congress – have helped global gold demand remain buoyant for the year to far and September was no different.
The Council said that in fact so strong were the inflows of $US3.9 billion across all regions in September that the value of ETF holdings of the metal rose above 2012 levels when the gold price was 18% higher.
North American funds led the way on a regional level, adding 62 tonnes ($US3.1 billion, with a 4.5% rise in the Assets Under Management or AUM). European-listed funds brought in 7.7 tonnes ($US586 million, 1%), with UK-based fund holdings continuing to see all-time highs, reaching 21% of global gold-backed ETF assets in September as investors position for that October 31 Brexit deadline. Asian funds also added 3.9 tonnes ($US187 million, 4.6%).
Low-cost gold-backed ETFs in the US have seen positive flows for 15 of the past 16 months, and have increased their collective holdings by 51% so far this year.
The World Gold Council also noted that net long positions on COMEX reached all-time highs last month.