Make Kitco Your Homepage

Standard Chartered: 'gold to continue to draw investor interest'

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - Exchange-traded-product holdings of gold have been boosted this year by a flight to safety, and there is potential for prices to move still higher, said Standard Chartered. Analyst Suki Cooper pointed out that inflows of gold into global ETPs so far in 2020 have exceeded the prior record hit in 2009. Positive sentiment in so-called risk markets has capped gold’s upward momentum lately, the bank said in a report just ahead of the weekend. “However, aside from near-term hurdles, we believe gold-price risk remains skewed to the upside,” Standard Chartered said. “The flight to safety and quality is buoying up physical ETP holdings, which have scaled new highs as concerns over a resurgence in COVID-19 infections linger.” The physical market remains weak, Standard Chartered said. Still, Cooper continued, “We expect gold to continue to draw investor interest given unprecedented global monetary easing and fiscal stimulus, low to negative interest rates, and gold’s strong correlation with real yields.” The strong investment demand meant U.S. gold imports from Switzerland in May hit a record high of 127 metric tons, with a year-to-date total of 285.9 tons, pointed out Standard Chartered, citing Swiss trade data. “This is more than the total gold exported from Switzerland to the U.S. over the past 10 years (210t) and more than triple the previous record in 2016 (85.6t),” Standard Chartered said. “U.S. shipments accounted for 87% of Swiss exports in May, compared to 1% in the past few years.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.