European flows in to gold ETF's outpaces US investment

February 15, 2021

According to data from the World Gold Council (WGC), net inflows to global gold-backed exchange-traded funds (ETFs) amounted to 13.8 tonnes in January.

The impressive figure brought total global holdings of gold ETFs to 3,765 tonnes, which is equivalent to around 226 billion U.S. dollars) the end of last month. Holdings of gold ETFs listed in Europe saw a large increase of 17.5 tonnes in January, while those listed in North America decreased by 6.3 tonnes.

Since its inception in 2003, gold ETFs and similar products have accounted for a significant part of the gold market, with growing acceptance among both institutional and individual investors.

"We believe investment demand for gold will remain strong in 2021 as investors react to inflation, global rates, and risk around budget deficits and equity market corrections. The reverse course we’ve seen in global gold-backed ETFs from consecutive outflows at the end of 2020 to inflows now in January supports our view,"said Adam Perlaky, manager of investment research at WGC.

Gold has moved another 0.26% lower in the session. The channel marked by the red trendlines is still moving to the downside but it will be interesting to see what the yellow metal does at $1764.73/oz support level should the price reach there. At the moment the purple horizontal line is the major resistance zone and the price rejected the area last week. Beyond that, the top of the channel and the yellow level at $1959.33/oz are the levels to break and if the price does manage to take the levels out

it could be all the way back to the all time highs.

Source: https://www.kitco.com/news/2021