Investors have reacted to central bank easing measures by pumping almost $3 billion into gold exchange traded funds so far this month.
“Investors continued to pile into gold, sending holdings of physically backed exchange traded funds to a record high, with expectations that recent stimulus moves by central banks will support further strength in bullion,” Reuters reported Tuesday.
GLD is the largest gold ETF with about 1,327 metric tons of bullion valued at $75.2 billion.
The gold fund has gained 12% the past three months as investors flock to the precious metal on worries the latest central bank stimulus programs will debase global currencies, especially the U.S. dollar with the Federal Reserve launching QE3. [Central Bank Stimulus Boosts Gold ETF Outlook]
Gold holdings in bullion-backed ETFs hit a record high of about 2,294 metric tons on Sept. 24, according to Reuters.
So far in the third quarter, investors have added $2.6 billion to GLD and $1 billion to IAU.
Gold prices rose to $1,775 an ounce Tuesday morning.
“Going forward we expect much will depend on whether there is follow through buying after the initial reactions to the four recent episodes of QE/stimulus,” said William Adams, head of research at FastMarkets, in a MarketWatch report.
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Full disclosure: Tom Lydon’s clients own GLD.
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