Trade Analysis & Reviews: 06.08.2021 - World Gold Council says...

06.08.2021 10:48 AM

World Gold Council says investor demand will continue to increase until the end of 2021

The World Gold Council (WGC) remains optimistic even though gold continues to fall in the market. The committee said they are not worried because the precious metal has a solid base, thanks to the rally last July, which happened due to a moderate influx of investors in gold-backed exchange-traded funds (ETFs).

The WGC reported that there were 11.1 tonnes of global gold ETF inflows in July, with the value of assets under management increasing to $ 669 million, up by 0.3% from the previous month.

Analysts noted that these major ETF infusions coincided with a recovery in gold prices, and was especially noticeable in the second half of the month, when many central banks maintained a dovish stance on monetary policy despite increased inflation.

The report says total ETF demand is 3,636 tonnes, which is 7% below the record high in October.

But WGC said there will be insufficient capital inflows to reverse the weakness seen in the first quarter, even though the gold market continues to see healthy investment demand. Outflows in ETFs is also $ 6.1 billion, which is 118 tons lower than the previous month.

With regards to regional markets, the WGC reported that funds traded in North America fell 7.3 tons, while funds traded in Europe rose 17.1 tons. Funds traded in Asia, on the other hand, increased by 1.0 tonnes.

Clearly, the report highlights the growing popularity of gold-backed ETFs, the inflow of which is increasing by 40% y / y (56.2 tons) and currently accounts for more than 5% of the total global market for gold ETFs.

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