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BMO: Strong ETF demand underpinning gold prices

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(Kitco News) - Investors continue piling into gold-backed exchange-traded funds, thereby putting a floor under prices, said BMO Capital Markets. ETFs for precious metals trade like a stock but track the price of the commodity, with metal put into storage to back the shares. BMO analysts cited Bloomberg data showing another 205,000 ounces were added to ETF holdings Tuesday, which the bank said was the 13thconsecutive day of net additions. This takes net inflows over the year to date to 411 metric tons, BMO said. “While the strength in ETFs may not be enough to stop global gold demand [from] falling this year amid a weak jewelry market, the ETF flow from macro asset allocators is very supportive of price,” the bank said. Analysts also said silver ETF inflows have also been strong, with 3.8 million ounces added Tuesday, leaving net additions up 13% for the year to date.

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