Gold ETF investors come roaring back
Ole Hansen, chief commodity strategist at Danish bank Saxo, says gold has been the clear winner in 2016 as the uncertainty on financial markets reduce the likelihood of rate hikes in the US and geopolitical turmoil spur safe-haven buying.
Gold futures in New York were trading at $1,116.90 an ounce on Friday, up more than 5% since the start of the year, after hitting a near three-month high earlier in the week.
The price of gold briefly scaled $1,300 an ounce around this time last year only to fall below $1,100 by the end of summer
Hansen says gold is following a similar pattern to January last year when the metal was boosted by the surprise currency move by Switzerland's monetary authorities, speculation about quantitative easing by the European Central Bank and the Greek debt crisis. The price of gold briefly scaled $1,300 an ounce around this time last year only to fall below $1,100 by the end of summer.
Gold's solid opening has seen investors jump back into gold for the first time in several months says Hansen with more than $2 billion or roughly 57 tonnes flowing into physical gold-backed gold ETFs since the start of the year compared to 83 tonnes during January 2014. Around 140 tonnes left global gold ETFs over the course of 2015.
Gold says if the gold price could build a base around current levels above $1,100, the market should remain in an uptrend for several weeks.
Image: Generation Grundeinkommen