Gold ETF Sales Dwarfed By Central Bank, Jewellery, Coin and Bar Demand
Friday, 24 May 2013
Holdings in gold exchange-traded funds fell to fresh four-year lows yesterday but demand from central banks for bullion coins and bars, plus store of wealth jewellery demand is supporting gold.
SPDR Gold Trust, the world’s largest exchange-traded gold fund, said its holdings fell 0.15% to four-year lows of 1,018.57 tonnes on Thursday.
Gold held by gold-backed ETFs, which in 2012 accounted for just 6% of the world’s gold demand, fell by 177 tonnes in the first quarter according to the World Gold Council data.
ETF demand is just one facet of the broad based global demand that gold enjoys today and this fact continues to be not fully appreciated by many market participants who are tending to focus on falling ETF demand and liquidation to the exclusion of all else.
In the first quarter alone, central banks acquired 109 tonnes of gold – the seventh consecutive quarter of central bank gold accumulation.
Central Banks Diversifying Into Gold Bullion “As Prices Fall”
Central banks are continuing to diversify into gold due to significant systemic and monetary risk and many will use the recent price weakness as an opportunity to diversify into gold at cheaper prices.