News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

The Long View

Investment Demand and AUM for Gold ETFs both Hit A Record in May

June 19, 2020 - (Gold Market Wire) - Gold backed ETFs have continued to show strong inflows during the month of May with some $8.5 billion being added. This brings the Year-to-Date (YTD) inflows up to a level $33.7 billion, and total ETF holdings to 3,510 tonnes. Gold may be meandering in the past months, but the investment demand is there - and it is growing. Gold ETFs now account for some $195 billion of Assets under Management (AUM).

Ok, its not the multi-trillion dollar Treasury market, but a 5% addition to the total in a single month is nothing to be sneezed at. AUM has nearly doubled in the past year and YTD inflows are now at record highs. As interest rates look like they won't be rising for years into the future, the common argument against Gold - that it offers no yield - is falling by the wayside.

The Anglosphere, i.e. USA and UK appear to be the main sources of the demand for Gold ETFs, accounting for almost 90% of the May inflows. Behind them come Germany and France. The USA and UK account for some 70% of global ETF holdings, with the market leader SPDR and iShares Gold Trust taking the majority of the inflows. Shares physical, traded as an ETC (Exchange traded commodity, as opposed to a Fund) registered significant AUM inflow of 11.8% for the month of May. The Wordle Gold Council table reveals the demand for physical contracts, that can be traded via Exchange.

...people want the feeling of physical - even if its on an Exchange

On a big picture scale, the demand for Gold in portfolio is at all-time records.

Beleaguered miners, not to mention their shareholders, can stomp their feet all they want about how 'unfair' it is, but the demand is there, and it is finding its way into the ETF world. Are ETFs dangerous instruments with which to invest in Gold with? Well, the public doesn't think so - but the public can be wrong a lot of the time. Miners have 'security' issue all of their own, like nationalization, industrial action and the wild machinations of the alluvials. In this digital world people seem ready to trust a click more that a mine. But for those who want the "real thing" - they are probably best advised to go and and get it.

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