Gold ETFs see 13th week of net inflows
Physically backed gold exchange-traded funds (ETFs) saw positive net investments last week, as investors from the United States and China sought opportunities in the precious metal, according to World Gold Council (WGC) data. This marks the 13th consecutive week of positive inflows.
Data reveals that gold ETFs attracted $2.3 billion in inflows, while $479 million were redeemed, resulting in a net positive investment of $1.91 billion. Analysts attribute this trend to investors recognizing the value of gold, with prices currently below $4,200 per ounce. It seems to have a floor at $4,000, they said.
Gold Price Fluctuations
On Tuesday, gold was quoted at $4,145 an ounce, down over 4 per cent month-on-month and nearly 0.5 per cent in the past week. Darshan Desai, CEO of Aspect Bullion & Refinery, said gold remains volatile, with prices recovering some ground. “US inflation, interest-rate expectations, the dollar and bond yields continue to shape market sentiment, while geopolitical developments add to the uncertainty,” he said.
Investment Patterns
US investors contributed nearly $1 billion to gold ETFs last week, while Chinese investors added $498 million. The UK saw inflows of $237 million, and Japan recorded $141.8 million. French investors chose to exit, encashing $44 million.
Year-to-date, Asian and European investors have led ETF investments, with Asia contributing $18.38 billion and Europe $17.62 billion. Country-wise, inflows into ETFs in China have topped $10 billion at $10.41 billion. Investments in the UK were $9.8 billion, followed by those in the US at $5.22. Indian inflows were the fourth-largest at $4.7 billion, though weekly updates are not available. Inflows in Switzerland ($3.56 billion), Germany ($2.42 billion), France ($1.77 billion) and Japan ($1.06 billion) were significant.
Gold’s key support sits at $3,950-4,200. Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd and President of India Bullion and Jewellers Association Ltd, said festive and central-bank demand should keep dip-buying alive heading into Dhanteras.
Chainani said this week, US housing data, jobless claims and flash PMIs, along with Fed commentary ahead of the October 28 decision and crude oil prices will be the key to the precious metal’s fortunes. After soaring to a record high of $5,608 an ounce, the yellow metal has shed over 25 per cent of its gains after the Iran war broke out on February 28.
