1 week ago
Gold Surges 15% as ETFs and Central Banks Buy
Gold prices have risen a lot, gaining 15% in one month.
Earlier, gold had fallen sharply from a record above USD 5,500 per ounce to nearly USD 4,600.
Investors have recently bought more gold through funds called ETFs.
Central banks have also purchased large amounts of gold.
South Korea’s central bank returned to the gold market after 13 years.
Many central-bank officials expect countries to increase their gold reserves.
Expectations that US interest rates may stay unchanged have also helped gold.
Lower bond yields and a weaker dollar can make gold more attractive, but investors still need to consider their goals and risk tolerance.
Gold rose 15% in one month after falling from a January record of more than USD 5,500 an ounce to nearly USD 4,600 by August.
Global gold ETF holdings increased by about 23 tonnes, with roughly 45 tonnes added month-to-date in August.
Central banks bought 288.9 tonnes of gold in the second quarter, up 62% from the previous year.
South Korea’s central bank resumed gold purchases after 13 years, while a World Gold Council survey found strong expectations for further official-sector buying.
Expectations of steady US interest rates, lower bond yields and a weaker dollar have supported gold’s recovery, although it remains about 16% below its earlier peak.
- Who
- Gold investors, exchange-traded funds, central banks and the US Federal Reserve are central to the development.
- What
- Gold gained 15% in one month as ETF inflows, central-bank purchases and expectations about interest rates supported its recovery.
- Where
- The movement involves global gold markets, with references to the United States, South Korea and Iran.
- When
- The rally occurred over one month; the article also cites January, August and second-quarter data.
- Why
- Renewed investment demand, official-sector buying, expectations of unchanged US interest rates, potentially lower bond yields and a weaker dollar supported gold.
Key facts
- One-month gain
- 15 percent
- Earlier peak
- More than USD 5,500 an ounce in January
- August low
- Nearly USD 4,600 an ounce
- ETF additions
- About 23 tonnes globally, including around 45 tonnes month-to-date in August
- Central-bank purchases
- 288.9 tonnes in the second quarter, 62 percent above the previous year
- Survey outlook
- 89 percent of World Gold Council respondents expected global gold reserves to increase over the following year
- Current position
- Gold remained around 16 percent below its earlier peak
Sources
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