Gold exchange traded products continue to shine as investors flock to haven assets. Inflows into ETF Securities’ gold ETPs continue for the seventh consecutive week amid volatile equity markets…..
James Butterfill, ETF Securities’ Head of Research & Investment Strategy, said: “While gold appears fairly valued according to our models, the risk of a sudden shock to cyclical markets could send gold prices considerably higher. Investors are buying into gold as an insurance asset – a hedge against what were seen as tail-risks which are now emerging. Fears over anti-establishment governments strengthening or a dislocation in financial markets are some of the concerns on investors’ minds.”
“Despite a rise in the S&P500 and a decline in option-implied equity market volatility, we continued to see inflows into gold ETPs last week, as investors focus on the shoring up of defensive positions in their portfolios. The European Central Bank’s commitment to price stability through what will likely be more rounds of quantitative easing and negative interest rates will likely be price-positive for gold. Gold serves as a hard asset store of value – a monetary asset that investors may prefer to hold instead of a currency they feel is being debased.”
Commenting on ETF Securities’ flows, Townsend Lansing, Head of ETCs, said: “We have seen over US$1 billion net inflows into our gold ETPs since the start of the year, representing 55% of all flows into European gold ETPs in 2016, with Gold Bullion Securities (GBS) being the most actively traded gold ETP in Europe YTD*.”
“Gold has always been the foundation of our offering and we’re delighted to see that investors continue to consider ETF Securities as a leader in this space.”