Gold prices continued to rally on June 22, heading toward the highest since February 2012, after massive inflows into gold-backed exchange-traded funds (ETFs) in the United States.
Gold for delivery in August, the most active contract on the Comex market in New York, touched a high of US$1,779 per oz., the highest since February 2012.
The World Gold Council reported that June 19 saw a massive 27.3 tonnes (974,000 oz., worth over US$1.7 billion) inflow into gold-backed ETFs.
The world’s largest gold ETF – SPDR Gold Shares (GLD) – received the lion’s share, with inflows of 23.1 tonnes, or 742,492 oz., on June 19, coinciding with the expiry of June GLD options.
According to a note from BMO Capital Markets, the haul on June 19 takes month-to-date inflows to 55.6 tonnes (1.96 million oz.), with the vast majority of demand coming from North America.
Gold prices have rallied more than 16% so far this year, supported by the rolling out of massive monetary stimulus from central banks around the world in response to the economic fallout of the Covid-19 pandemic.
Gold is often seen as a safe haven asset for global investors during times of economic turmoil, and with the number of coronavirus cases rising in some areas after governments began to loosen their lockdown protocols, overall economic uncertainty remains high.
On June 21, the World Health Organization reported a record jump in global Covid-19 infections, with the biggest increases seen in North and South America.
Additional monetary stimulus to combat the pandemic, including the Bank of England’s bond buying program announced last week, could lend further support to bullion as a hedge against inflation.
“Gold appears poised for breakout,” Fawad Razaqzada, market analyst at ThinkMarkets in London, said in an emailed note to Bloomberg. “While gold is undoubtedly boosted by haven flows due to the economic damage caused by the pandemic as well as concerns over a second wave, there is little doubt that the metal is also finding good support from central bank money flooding the financial markets.”
Ole Hansen, head of commodity strategy at Saxo Bank A/S, shares a similar sentiment:
“Covid-19 worries together with the eventual inflationary impact of central bank stimulus are providing the support for gold,” he said.
— This article first appeared in MINING.com. The Northern Miner and MINING.com are part of Glacier Resource Innovation Group.
“The world’s largest gold ETF – SPDR Gold Shares or GLD – received the lion’s share with inflows of 23.1 tonnes or 742,492 ounces on June 19”
Would you be able to provide any verifiable evidence to support this gold holding claim? How reliable are GLD’s holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund. Some other red flags I’ve stumbled upon, verified and welcome everyone else to verify for themselves:
“Did anyone try calling the GLD hotline at 866 320 4053 in search of numerical details on GLD’s insurance? The prospectus vaguely states “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” When I asked about how much of the gold was insured, the representative proceeded to act as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.”
“I remember there was a highly publicized visit by CNBC’s Bob Pisani to GLD’s gold vault. This visit was organized by GLD’s management to prove the existence of GLD’s gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”