The gold market is still struggling to attract new investor interest that would push prices out of their trading range. However, the World Gold Council (WGC) said that it does see some improvement in the marketplace.
Thursday, the WGC said that 18.3t tonnes of gold, valued at $1.1 billion, flowed out of the global gold-backed exchange-traded funds (ETFs) in April, marking outflows for five of the past six months. In total, global assets under management (AUM) stand at 3,567 tonnes, valued at $203 billion.
“Since the peak asset levels in November 2020, gold ETF AUM has fallen nearly 14%, with 8% coming from outflows and 6% coming from the gold price selloff in US dollar terms,” the analysts said.
However, the WGC did some bright spots in the gold market. In particular, European funds saw gold inflows last month for the first time since January.
According to the report, North American-based gold funds led the way in outflows in April, with total holdings dropping by 28.4 tonnes. In comparison, European-based funds saw inflows of 10.6 tonnes.
The report also noted inflows into low-cost ETFs. In a recent interview with Kitco News, Juan Carlos Artigas, head of research at the WGC, said that the rise in low-cost gold EFTs is an indication that investors are trying to keep their costs down as they build long-term strategic positions in their portfolios.
Although the investment demand has been fairly disappointing since the start of the year, analysts at the WGC said that they expect to see a pick-up through the second half of 2021. They noted that rising inflation pressure continues to support the precious metal.
“Rising inflation expectations and questions around central bank tapering are front and center for investors. Despite recent increases in inflation, central banks have maintained their accommodative stance in words and actions. Markets remain nervously poised for the outcome of rising inflation and central banks’ reactions to it,” the analysts said in a separate report.
The WGC also noted that rising bond yields could continue to be a headwind for gold in the short term.
Another support for gold prices through 2021 continues to be the COVID-19 pandemic and concerns that a global rise in cases could weigh on economic activity.
“Despite further signs of economic improvement and rallying equity indices, investor optimism for a quick recovery seems to have subsided in April. Should optimism continue to slide in May, we believe this could be positive for safe-haven demand for gold but may weigh on consumer demand,” the WGC said.
The WGC’s optimistic outlook for investment demand comes as gold prices push above $1,800 an ounce for the first time since early February. June gold futures last traded at $1,811 an ounce, up 1.5% on the day
Written by Neils Christensen for KITCO ~ May 6, 2021
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About admin
Please allow me to introduce myself; I am Jeffrey Bennett, President of Kettle Moraine, Ltd., the parent of Sierra Madre Precious Metals.
I have been married for 53 years with two children and four grand-children, a veteran of Viet Nam, student of history (both American and film), and was host for fifteen years of Perspectives on America on the alternative airwaves, covering such subjects as, health and wellness, news, political satire, education and editorial commentary on current events through the teaching of history, and Protecting Your Wealth. In early 2018, I took a several month hiatus to complete some family business but returned to airwaves April 17, 2018).
At the age of ten, I sat in a bank-vault in the Citizens Bank of Mukwanago, Wisconsin with my grandfather going through bags of old American Peace dollars, hand-selecting each coin as dated rolls of 20 coins were carefully put together and rolled. Learning of the history of these beautiful pieces of Americana, I asked my grand-father, "Why are we doing this?" to which he replied, "Because someday they are going to do the same thing with the silver in our money that, that (S.O.B.) Roosevelt did with gold in 1933." It took only six-years for his prediction to come to pass at the hands of a disciple of Roosevelt's... and what will a Federal Reserve 'dollar' purchase today - and what will that old 90% Silver Peace Dollar purchase?
Although at the age of ten, there was little understanding of the meaning of it all, over the next half-century I became well-versed on the subject matter. During this summer of my education, I began to purchase silver coins as a collector and some small, international gold coins two years later - not an easy feat in the shadow of the Roosevelt confiscatory policies of 1933. Although those policies remained in effect until the mid-1970's, it was not until 1991 that I found that one could make a living providing precious metals and collectible, historic numismatic coins to a willing and concerned clientele.
It was also during that year, that I began a relationship with one of the first Trust companies to give the public access to gold and silver as part of an Individual Retirement Account (IRA) - and Kettle Moraine, Ltd., founded in 1995, but have ceased providing service due the the intense change-over of the provider.
In November 2011, after a 15 month broadcast on another network, I returned to the airwaves with my then revamped program, Life, Liberty & All That Jazz, and for over 28 years, I have been proud to serve the family of listeners of my numerous broadcast programs for physically-held precious metals for investors and collectors alike. On March 23, 2020 I launched my brand new - appropriately named program, The Edge of Darkness on the Republic Broadcasting Network, and thus continue to remain available to our long time clients and their families. Ah yes - find out what "inter-generational" wealth provision has done for our clients over the past three decades.
Don't buy the sizzle of that steak until you understand the cost! In other words, don't buy the bull being dispensed by the 'rare coin' pitchmen until you understand the full story. We, at Sierra Madre Precious Metals, will be proud to serve your needs.
