With gold ending September at an all-time excessive, Australia’s largest bodily gold ETF issuer, World X ETFs, skilled a file surge in gold ETF inflows, marking its strongest month ever whereas additionally reclaiming market share – and gold funding strategist Justin Lin sees even stronger months forward as buyers search safe-haven belongings and gold targets US$4,000.
Forward of a potential US authorities shutdown that’s supporting demand for gold, the dear steel has right this moment hit US$3,875.53 an oz., constructing on Tuesday’s peak and a number of other prior information set in September.
“With gold’s spectacular rise, World X’s suite of bodily gold ETF noticed $136.5 million in internet inflows this September, the most important one-month stream ever, beating the prior file month of March 2020,” mentioned Lin.
“Most has gone into our World X Bodily Gold Structured Product (GOLD), the world’s first gold ETF, and the currency-hedged model, World X Gold Bullion (Foreign money Hedged) ETF (GHLD), has additionally seen robust demand.
“Buyers are flocking to gold to hedge tail threat because the US authorities shuts down – falling rates of interest and a weakening US greenback are additionally driving gold shopping for,” Lin mentioned.
“Extra broadly, bodily gold ETFs on the Australian Inventory Alternate (ASX) loved a complete $180 million in internet inflows over the month, with World X capturing round 75% of all gold ETF flows in Australia. Over the 12 months so far (YTD), World X’s market share stands at simply over 60%.”
With September flows included, this brings YTD inflows into World X’s gold ETF suite to $494 million.
“Complete Australian gold ETF flows now sits at $819 million, which is on observe to smash the file set in 2020,” mentioned Lin. “Gold’s robust attraction on this surroundings is plain. We’re witnessing a file 12 months for gold funding by way of ETFs in Australia and across the globe as buyers search security and stability in these very unsure financial occasions.”
World X ETFs expects gold costs to maintain climbing as decrease rates of interest scale back the chance value of holding gold, probably making it extra engaging in contrast with yielding belongings reminiscent of authorities bonds or money investments.
“Given the momentum and confluence of tailwinds, we count on gold to move increased nonetheless; our year-end gold value goal is US$4000 per ounce, which might additional ignite gold ETF demand,” Lin mentioned.
“Whereas some buyers have been shopping for gold bars from a dealer or a mint, ETFs present a better liquidity and ease to spend money on gold and silver, with out having to fret about storage or insurance coverage,” Lin ended.
