Robust ETF Inflows Propelled Gold Prices to 8-Year Highs

SEATTLE (Scrap Monster): The massive inflows into gold-backed exchange traded funds (ETFs) in the U.S. lifted gold prices to 8-year high on Monday. The prices of the yellow metal hit the highest level since February 2012. The gold for delivery in August contract at the New York Comex market hit record high of $1,779 per ounce.

The latest data published by the World Gold Council (WGC) stated that gold-backed ETFs recorded inflows of 27.3 tonnes on Friday alone. The SPDR Gold Shares accounted for 23.1 tonnes of the inflows. The gold inflows to ETFs so far this month totalled 55.6 tonnes, said report published by BMO Capital Markets. The North American region witnessed largest inflows in June 2020.

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Incidentally, gold prices have rallied nearly 16% so far this year. It is considered as a safe-haven asset by investors worldwide, especially in the current economic uncertainties due to Covid-19 pandemic. With global infections touching new records every day, the central banks around the world will be forced to come up with more monetary stimulus measures, which in turn could lend further support to bullion’s appeal as a hedge against inflation.

The fears of a second wave of the virus outbreak coupled with inflationary impacts of central bank stimulus measures are likely to take gold prices to new heights.