Gold-backed ETF inflows surge in Q1
“[A]ssets under management (AUM) in these products increased by a record US$23bn over the quarter,” the report said, as a 10% increase in flows combined with a 6% quarterly increase in gold prices.
Holdings of gold also reached as historic high, totalling 3,186 tons by the end of the quarter.
The volatility that rocked global financial markets had also caused turbulence in gold prices, the council said. As COVID-19 tore across the planet, uncertainty over the short- and long-term economic impacts coupled with ultra-low interest rates fuelled strong safe-haven flows.
However, there was also much selling of gold holdings amid a broad-based asset liquidation that impacted even long-term U.S. Treasuries. Gold sold off by as much as 7% during March before it rebounded later in the month off the back of concerted interest rate cuts and trillions of dollars in quantitative easing and fiscal-support measures announced worldwide.
“Uncertainty around the short- and long-term economic impacts of COVID-19 continues to drive sharp volatility across many assets,” the report noted. “The first few weeks of April have seen strong inflows continuing into gold-backed ETFs, taking holdings to fresh record highs.”