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Gold ETFs see big inflows on rising geopolitical concerns -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – Newly cast ingots made of 99.99% pure Gold are stored at Krastsvetmet, Russia’s non-ferrous metals facility. They were weighed there on November 22nd 2018. REUTERS/Ilya Naymushin/File Photo

Swati Verma and Patturaja Murugaboopathy by Patturaja Murugaboopathy

(Reuters] – ETFs (exchange-traded funds) which invest in precious metals and gold have experienced massive inflows. This is because investors are trying to hedge themselves against rising geopolitical tensions with Russia and Ukraine.

Refinitiv Lipper data showed that gold and precious metal ETFs saw an inflow this year of $4.7 billion, following outflows totalling $7.8 billion.

SPDR Gold Shares (NYSE 🙂 was the leader with inflows of $3.2 Billion, while iShares Silver Trust NYSE : and iShares Gold Trust recieved over $400 Million each.

GRAPHIC-Flows into gold and other precious metal ETFs – https://graphics.reuters.com/GLOBAL-MARKETS/xmvjoeodmpr/chart.png

Refinitiv also reported that the number of physical gold in ETFs has increased by 2.1%, to 69.5 Million Ounces.

On Thursday, safe assets like gold and the US rallied while global stock markets slumped following an attack by Russia’s President Vladmir Putin in Ukraine. [MKTS/GLOB]

GRAPHIC-Top inflows into gold ETFs this year – https://graphics.reuters.com/GLOBAL-MARKETS/lgvdwawyqpo/chart.png

Alexander Zumpfe of Heraeus, who is a precious metals dealer said that the Russian invasion of Ukraine has put markets into panic mode. Investors are fleeing from safe havens by throwing out shares and dumping them.”

Inflation concerns have been raised further after oil prices surpassed $100/barrel for the first time in 2014. Gold is viewed as an inflation hedge and tends to be more favorable than gold due to higher inflation.

The price of other precious metals, such as platinum and palladium, also rose on Thursday. Analysts expect more inflows into this precious metal group in the coming weeks.

Russia is third in the production of gold, while Nornickel is a significant producer of palladium (and platinum) that are both used to clean exhaust gases from cars.

Commerzbank (DE) analysts stated in a note that Palladium is used as an autocatalyst and production would have to be cut if there are no sufficient supplies.

It will be nearly impossible to find the palladium needed in other countries.

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