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Precious Metals
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General Market Commentary
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General Precious Metals
Gold price nears $1,800 on ETF frenzy
The rally in the gold price gained fresh momentum on Tuesday as investors piled into physically-backed gold ETFs to secure hard assets amid expectations of continued global ultra-low or negative interest rates and currency debasement.
Gold for delivery in August, the most active contract on the Comex market in New York, touched a high of $1,786.10 an ounce, the highest since October 2012 and up 17% so far this year.
The last time gold traded above $1,800 an ounce was September 2011, but it ended that year at $1,565 an ounce.
The World Gold Council reported that Friday saw a massive 27.3 tonnes (974,000 ounces worth more than $1.7 billion at today’s prices) inflow into gold-backed exchange-traded funds (ETFs).
The world’s largest gold ETF – SPDR Gold Shares or GLD – received the lion’s share with Friday inflows of 23.1 tonnes or 742,492 ounces, coinciding with the expiry of June GLD options.
On Monday GLD hauled in another 6.7 tonnes, or more than 216,000 ounces, bringing total holdings to 1,166 tonnes (37.5m ounces) worth $66 billion, the highest since April and February 2013, respectively.
Rock beat paper, briefly
While launched a full 18 months after the first physically backed gold ETF was created in Australia, GLD quickly dominated the market.
GLD was listed on November 18 2004 and saw a pretty good first day. Investors bought just over 8 tonnes, or 260,000 ounces of gold, affording the fund a net asset value of $115 million.