Gold inflow into global exchange-traded funds (ETF) are on pace for a yearly record, said BMO Capital Markets, and the demand is significant since investors tend not to exit quickly should prices turn south. Colin Hamilton, commodities analyst with BMO Capital Markets, commented that the strong ETF demand has helped boost gold prices at a time when jewelry demand has been unusually weak.
The ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares. Inflows for the year to date are around 450 metric tons, Hamilton said. “Moreover, unlike retail demand, we see these purchases as relatively insensitive to prices,” he said. “This year is on course to mark a record for annual ETF inflows, which in our estimates currently make up over a third of global gold demand for the first time.”
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