`Nervous’ investors pile into gold ETFs as global tensions mount

While equities rebounded Tuesday after Chinese President Xi Jinping struck a conciliatory tone in remarks on trade disputes with the U.S., geopolitical angst is driving demand for gold as a haven. U.S. sanctions against Russian oligarchs may elicit a “ harsh response” from the Kremlin, and Middle East tensions mounted after a suspected chemical-weapons attack in Syria.

“We’ve seen volatility risk in the stock market, and geopolitical risk concerning the situation in Russia and the Middle East,” said Michael Blumenroth, an analyst at Deutsche Bank AG who writes a weekly market report published on Xetra Gold’s website. “People have become nervous in Germany so they were buying gold.”

German investors aren’t alone. China’s Bosera Gold ETF has attracted $610.8 million this year, putting it on course for the biggest annual inflow since it was listed in Shenzhen in 2014. New York-listed iShares Gold Trust has attracted $1.49 billion in 2018, the biggest inflow of all commodity ETFs.

Gold futures for June delivery rose 0.4 percent to settle at $1,345.90 an ounce at 1:30 p.m. on the Comex in New York, a third straight gain. Spot-gold prices have rallied about 2.9 percent this year, outperforming the S&P 500 Index of equities as the dollar weakens.

(Written by Luzi Ann Javier)