Gold price: ETF investors remain bullish

On Wednesday, gold was trading up slightly from eight-week lows struck yesterday, exchanging hands for $1,277.10 in early afternoon dealings. The metal has gained 11% in 2017, but is nearly $80 an ounce off the year’s high struck less than a month ago.

Large-scale speculators have been reducing exposure to gold on derivatives markets, but retail and institutional investment in gold-backed exchange traded funds (ETFs) continues to grow. New data from the World Gold Council shows ETF vaults now hold around 2,357 tonnes after three straight quarter of net inflows this year.

As of 30th September 2017. Source: Bloomberg; Company Filings; ICE Benchmark Administration; World Gold Council

Despite the pullback in the gold price during September, North American gold investors poured money into gold ETFs, offsetting weakness elsewhere. Inflows for North American-based ETFs totalled 36 tonnes during the month, while Europe recorded net redemptions of 12 tonnes and Asia 1.7 tonnes.

Funds added just under 192 tonnes of gold year-to-date, equivalent to $7.5 billion, an increase of 7.7% of global assets under management from December 2016. Europe led by Germany accounts for the bulk of inflows in 2017 at more than 120 tonnes.

As of 30th September 2017. Source: Bloomberg; Company Filings; ICE Benchmark Administration; World Gold Council