Italian Turmoil Boosts May's Global Gold ETF Demand - WGC
(Kitco News) - Gold heldby global exchange-traded funds increased by 15 tonnes in May, led by increased activity in Europe and Asia,according to the World Gold Council (WGC).
Holdings stood at 2,484 tonnes at the end of the month, the organization saidWednesday.
This was the third straight month of inflows, which followed April’s impressive increase of 72.2 tonnes that marked thelargest level of inflows in more than a year, the WGC added.
May’s gains were driven by Europe and Asia, which added 25.6tonnes and 20.8 tonnes, respectively.
“Political turmoil in Italy” was largely responsible forencouraging European buyers’ interest, said WGC director of investment researchJuan Carlos Artigas.
In contrast, North American funds reversed their positive 2018trend and posted a loss of 29.6 tonnes, the WGC report noted.
“[North American losses were] likely a result of the volatileprices in the gold market which left gold lower by 60bps (in dollar terms) onthe month,” the WGC said. “After [a] strong early-year performance, gold hasgiven back much of its gains, remaining largely flat on the year, despite theUSD rallying over 4% in the second quarter.”
Looking at individual ETFs, European Xtrackers Physical Gold attracted the mostinterest last month, with its holdings rising by 23.2 tonnes.
Asian demand was boosted by China’s Bosera Gold ETF, withadditional 19.6 tonnes of holdings added in May.
The world’s largest gold-backed fund, SDPR Gold Shares(NYSE: GLD), was the main downward driver behind NorthAmerican outflows, losing 24.2 tonnes, while iShares Gold Trust (NYSE: IAU) lost 2.4 tonnes.
Gold ETFs usually trade similar to stocks, but they track theprice of the commodity, with the physical metal placed safely into storage toback the ETF shares. ETFadvocates say that this method provides exposure to the yellow metal withoutthe hassle of assaying, insuring, and storing the metal.
By Anna GolubovaFor Kitco News
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