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Investment in gold ETFs soars 7x in March quarter

A surge of investor interest in gold as the COVID-19 pandemic struck saw holdings in gold-backed exchange-traded funds (ETFs) soar by 298t during the March quarter, the highest quarterly inflow for four years, the World Gold Council said on Thursday.
Investment in gold ETFs soars 7x in March quarter Investment in gold ETFs soars 7x in March quarter Investment in gold ETFs soars 7x in March quarter Investment in gold ETFs soars 7x in March quarter Investment in gold ETFs soars 7x in March quarter

Demand for ETFs surged seven fold year on year in Q1, according to the World Gold Council

"Coronavirus concerns started to take hold in earnest during February and the pandemic was the key driver of investment into these products for the remainder of the quarter, fuelling inflows across all regions," the WGC said in its quarterly gold demand trends report.

European-listed funds saw the highest levels of investment, with holdings in the region up by 150.1t or US$8 billion. North America-listed funds were close behind, with inflows of 128.5t, or around US$7 billion.

The trend looks sent to continue in the short term, with the WGC noting the first few weeks of April "have seen strong inflows continuing into gold-backed ETFs, taking holdings to fresh record highs".

After its initial March pullback, the WGC said the gold price had been helped by a combination of interest rate cuts, quantitative easing and fiscal support.

While demand for ETFs has skyrocketed, consumer demand for gold has fallen off a cliff, with China - the world's largest jewellery consumer - recording a 65% drop in demand in Q1.