Net flows into SPDR Gold Shares surged to a new record $1.63 billion, the highest since its listing in 2004. The surge in net flows into one of the largest gold exchange-traded funds (ETFs) comes against a backdrop of declining cryptocurrencies and stock values.
Investors are more bullish on gold
One of the world’s largest gold ETFs, SPDR Gold Shares, recently saw net inflows of $1.63 billion, its highest since it was listed in 2004, a report said. Friday’s record inflow, which was attributed to the slump in stock and crypto prices, could be a sign that investors are becoming more bullish on gold, according to the report.
As explained in a recent Bloomberg report, this increase in net inflows into SPDR gold stocks is equivalent to 27.6 tons of the precious metal. The spike in SPDR Gold Shares net ETF inflows comes as the world braces for a resumption of rate hikes by the US Federal Reserve, which appears to be heading towards an end to large asset purchases, according to a previous report by Bitcoin.com News.
In addition to impending US Federal Reserve rate hikes, growing global tensions over Russia’s alleged plans to invade Ukraine have fueled demand for gold.
The static price of gold
However, despite the increase in net inflows into the gold ETF, analyst Daniel Briesemann is quoted in the Bloomberg report as expressing surprise that the precious metal is not benefiting from the strong ETF inflows.
“We find it very surprising that gold prices have not benefited from robust ETF inflows. This week, market participants are expected to focus primarily on the US Federal Reserve meeting,” Briesemann, an analyst at Commerzbank, is quoted as saying.
Although gold is viewed by many as a reliable alternative store of value, it has failed to protect its holders from the impact of the Federal Reserve’s quantitative easing after its price in 2021 was almost 4% lower than when it started. In contrast, Bitcoin and other cryptocurrencies ended the year with double-digit gains or more.
However, as cryptocurrencies and stocks continue to slide, some investors are looking to hold the precious metal again. At the time of writing, gold is trading at around $1,842 an ounce, which is almost a percent up from the Dec. 31 price of $1,828.
What do you think of this story? Tell us what you think in the comments below.
Terence Zimwara is an award-winning Zimbabwean journalist, author and writer. He has written extensively on the economic woes of some African countries, as well as how digital currencies can provide an escape route for Africans.
Photo credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer, or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.