Investors have increasingly sought refuge in gold as the coronavirus pandemic continues to crash economies around the world, new data showed.
Holdings in gold-backed exchange-traded funds (ETFs) surged by 298 tonnes in the first three months of the year, pushing total inflows into these products to 3,185 tonnes, according to the World Gold Council (WGC) on Thursday.
Inflows into ETFs between January and March increased by more than 300 percent, while the total gold demand rose by 1 percent to 1,083 tonnes during the same period.
“The coronavirus outbreak, which swept the globe during the first quarter, was the single biggest factor influencing gold demand. As the scale of the pandemic - and its potential economic impact - started to emerge, investors sought safe-haven assets,” the council said in its report.
“The COVID-19 pandemic has had a significant and unprecedented impact on global gold demand. The modest strength in the first quarter was due to investment demand, fueled by huge inflows into gold-backed ETFs,” added Louise Street, market intelligence at the World Gold Council.
The unprecedented demand has increased the value the precious metal, which has rallied about 15 percent since the middle of March. According to UBS strategists Joni Teves and Giovanni Staunovo, gold could climb to $1,800 an ounce in the coming weeks.
“Gold is the preferred investment vehicle during times of uncertainty,” Karim Merchant, CEO and managing director of Pure Gold Jewellers, told Zawya earlier.
However, while gold-backed ETFs have emerged as a popular asset among investors, gold bars and coins didn’t attract as much interest.
According to the WGC, investment into bars and coins fell 6 percent to 241.6 tonnes. Jewelry demand also dropped 39 percent to a record low of 325.8 tonnes.
(Writing by Cleofe Maceda; editing by Seban Scaria)
#Coronavirus #Gold #ETFs #Investment
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2020