ETF pile-on continues as gold gains for second straight day
Gold bugs continued to pile into gold ETFs on Monday, as the yellow metal gained for a second straight day.
Gold rallied as high as US$1,282.79 an ounce before settling at $1,273.60 on the spot market – a gain of 80 cents from Friday.
On Friday ETF holdings increased 7.6 metric tons to 1,822 tons, to reach the highest level since 2013, according to Bloomberg data. ETF holdings have increased for 14 straight days, the longest buying streak since March 7.
“The rise in ETF holdings is really a symptom of Western demand related to gold as a safe-haven asset.”
Gold appears to be gaining from its appeal as a safe-haven asset, after weak U.S. jobs data and evidence of slow economic growth in China increased its appeal for investors.
The precious metal is up around 20 percent so far this year.
Jobless claims rose to 294,000 for the week ended March 7, exerting pressure on the U.S. Federal Reserve to hold interest rates steady.
“The rise in ETF holdings is really a symptom of Western demand related to gold as a safe-haven asset,” Bernard Dahdah, a commodities analyst at Natixis SA in London, told Bloomberg. “The unemployment figures from the US were quite disappointing so the market is saying there probably won’t be a rate hike in June.”
Meanwhile in China, factory output and retail sales grew slower than expected in April, according to data released on Saturday and reported by Bloomberg.