WGC: Gold-Backed ETPs Touched Record Highs in Europe

SEATTLE (Scrap Monster): The latest market update report published by the World Gold Council (WGC) indicates that holdings in gold-backed exchange traded products (ETPs) hit record highs in Europe during the initial quarter of the current year. The assets in European gold-backed ETFs reached 1,121.4t in Q1 2019, accounting for nearly 45% of the world gold-backed ETP market.

WGC attributed the rise to three factors- negative yields on Eurozone sovereign debt, geopolitical uncertainty and financial market volatility. Germany- the region’s largest economy faces the threat of a possible imminent recession. It must be noted that Italy is already in recession. The other largest economies in the region are also facing challenging times. The political uncertainty across the continent, especially in the wake of UK’s decision to exit the EU has contributed to gold’s increased acceptance among investors. In addition, the performance of the region’s equity market has lagged significantly, in comparison with other major western markets, WGC report said.

Over the past three years, the UK and German-listed funds witnessed highest inflows. The UK-listed funds reported total inflows of 250.9t, accounting for almost 45% of the total inflows. Meantime, German-listed funds reported an inflow of 218.3t. Overall, the European gold-backed ETPs reported rapid growth from 2016 to 2018, adding nearly 530t.