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Gold market sees $1.9 billion in ETF inflows in October

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(Kitco News) - The gold market saw record inflows into exchange traded products during the third quarter and it appears that trend has continued into the early start of the fourth quarter.

In a report Thursday, the World Gold Council said that global gold-backed ETFs saw $1.9 billion of net inflows last month.

“Flows were driven primarily across Europe and North America, increasing their collective gold holdings by 44.4t to a new record high of 2,900t,” the report said. “Momentum in October flows reflect the trends in the third-quarter which saw total investment demand up 110% compared to Q3 2018.”

The WGC said that the increase in gold-backed ETF came as gold prices pushed back above $1,500 an ounce, increasing 2.9% on the month. For the year, gold prices last month were up 18% and saw near all-time highs in every major G10 currency except for the U.S. dollar and Swiss franc.

Looking at regional inflows, the report said that European demand lend the way last month with European-listed funds seeing inflows of 31.3 tonnes last month, representing 67% of all inflows.

Analysts have noted that gold demand in Europe has been significant as investors have looked for safe-haven assets amidst growing economic uncertainty, ongoing turmoil surrounding Britain’s plan to leave the European Union and record level of negative bond yields.

North American funds saw inflows of 13.2 tonnes in October.

Another growing trend in the marketplace is the popularity of low-cost gold-backed ETFs. The WGC said that low-cost gold-backed ETFs in the U.S. have seen positive flows for 16 of the past 17 months and have increased their collective holdings by 55% so far this year.

In a recent interview with Kitco News, Juan Carlos Artigas, director of investment research at the World Gold Council, said he doesn’t expect the current investment trend to shift anytime soon.

“Even though investors want exposure to equity markets, they are not taking away their gold hedges,” he said. “We expect investment demand to continue to be robust because of growing uncertainty and low interest rates.”

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