Net inflows into the world’s largest gold ETF are surging despite falling stock and cryptocurrency prices.
Net inflows into SPDR Gold Shares reached a new high of $1.63 billion, the biggest since the fund’s inception in 2004. The spike in net inflows into one of the major gold exchange-traded funds (ETFs) comes amid plummeting cryptocurrency and stock prices.
Investors are becoming more bullish on gold.
According to a source, SPDR Gold Shares, one of the world’s largest gold ETFs, recently reported a net inflow of $1.63 billion, the most since its inception in 2004. The newspaper speculated that Friday’s record influx, which came while stock and cryptocurrency prices were falling, may be a sign that investors are becoming more positive about gold.
According to a recent Bloomberg analysis, the increase in net inflows into SPDR Gold Shares is equivalent to 27.6 tonnes of gold. The increase in SPDR Gold Shares net ETF inflows comes as the globe prepares for the United States Federal Reserve to resume interest rate rises, which, according to a recent Asian trade TV news report, appears to be on track to terminate substantial asset purchases.
In addition to the imminent rate rises by the Federal Reserve of the United States, gold demand has been boosted by rising global concerns over Russia’s suspected preparations to attack Ukraine.
Gold’s Price Is Static
Despite the increase in net inflows into the gold ETF, analyst Daniel Briesemann is described in the Bloomberg article as being surprised by the precious metal’s inability to capitalise on the high ETF inflows.
“This week, market participants will undoubtedly be focused primarily on the Fed meeting in the United States,” according to Briesemann, an analyst at Commerzbank.
While many see gold as a solid alternative store of value, it was unable to protect holders from the consequences of the United States Federal Reserve’s quantitative easing, with its price ending 2021 roughly four percent lower than it began. On the other hand, Bitcoin and other cryptocurrencies, on the whole, finished the year with double-digit increases or higher.
However, as cryptocurrencies and equities continue to fall in value, some investors are reconsidering owning the precious metal. At the time of writing, gold was trading at about $1,842 per ounce, over 1% higher than its December 31 price of $1,828.
