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Royal Mint Physical Gold ETC sees investment demand grow 115% so far this year

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(Kitco News) - The gold market may have seen some turbulent months as prices have fallen sharply from $2,000; however, investment demand for gold has remained strong as the Royal Mint sees strong demand for its gold-backed Exchange-Traded Commodity (ETC).

In a report published last week, HANetf, said its Royal Mint Physical Gold ETC (RMAU) exceeded $600 million in assets under management as of April 29, a 115% increase year-to-date.
The ETC has seen its gold holding increase by 169,392.822 ounces this year.

Analysts have noted that the gold market has seen strong investment demand through 2022, driven by rising inflation pressures, and geopolitical uncertainty due to Russia's ongoing war in Ukraine. The invasion has particularly impacted Europe as disruptions in the global supply chain have pushed food and energy prices to record highs. Rising inflation has threatened to push Europe into a recession, according to some economists.

"Gold has clearly become more appealing in recent months given the economic and geopolitical backdrop," said Hector McNeil, co-CEO of HANetf, in a statement to Kitco News.

"We launched The Royal Mint Physical Gold ETC (RMAU) just two years ago. We are thrilled to see it exceed 600 million dollars in AUM in such a short period of time. Gold will always be an asset of interest to investors seeking a diversified portfolio. With the world such a turbulent place, be it the pandemic, inflation, or the outbreak of war in Europe, this precious metal is likely to have even more appeal for those looking for some sort of insurance," McNeils said in a separate press release.

Gold ETF holdings are just 1% off of 2020 highs, but market is slowing - WGC

However, McNeil added that demand for RMAU also goes beyond gold's traditional safe-haven appeal. The fund also incorporates recycled gold as part of its holdings. Quoting a report from the United Nations, HANetf said that a record 53.6 million tons of electronic waste was generated in 2019 and only a sixth was recycled.

"Investors want green solutions and by introducing recycled gold to RMAU, we believe we have provided this," said McNeil. "RMAU's recycled gold feature should be viewed as part of the growth of the circular economy. According to Goldman Sachs, the circular economy solutions could help reduce global GHG emissions by 39%."

Along with its green footprint, helping RMAU stands out in a crowded paper market is the fact that it is the first financial product to be sponsored by The Royal Mint. The ETC's gold is also stored in the Royal Mint vaults.

"The involvement of The Royal Mint means the ETC has much more control over its supply chain," McNeil said.

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.