Gold ETFs post longest run in a decade

Gold ETFs post longest run in a decade
Bullion has rallied 18% so far this year as the trade war threatens global growth.
OCT 09, 2019
As global tensions escalate and signs of a slowdown mount, more investors are turning to gold. Worldwide holdings in bullion-backed exchange-traded funds have expanded for 17 days in a row, the longest run of inflows since 2009. The total stash now stands less than 35 tons away from a record set in 2012, according to the latest tally by Bloomberg. The consistent influx has come even as prices struggled to extend gains above $1,500 an ounce in recent weeks. Bullion has climbed 18% in 2019 as the U.S.-China trade war hurts global growth and central banks loosen policy. The rise in ETF holdings comes as investors fret that high-level talks between Washington and Beijing set for later this week are unlikely to yield a breakthrough. In addition, Federal Reserve Chairman Jerome Powell hinted Tuesday at the possibility of another interest-rate cut. [More: How gold could replace bonds as a portfolio diversifier]​ "Gold inflows are likely to persist," Citigroup Inc. said in a note, sticking with its forecast for a rally to $1,700 an ounce over six to 12 months. "Markedly weak manufacturing and services ISM data show that the slowdown in global trade is starting to bite the U.S. economy." Gold futures, a traditional haven and beneficiary when investors shun risk, advanced on Wednesday ahead of the trade talks and as markets awaited minutes from the Fed's September meeting. Prices pared gains before bouncing off the day's lows as investors weighed whether news that China is said to be open to agreeing to a partial trade deal would be enough to damp the precious metal's haven appeal. [More: Best returns in August came from ETFs loved by gold bugs] "Over the last few days, it's been fairly noisy as far as trade headlines," said Ryan McKay, a strategist at TD Securities in Toronto. "I don't think the gold market's ready to jump on one headline more than another, so at this point it's fairly choppy on either side of $1,500 here until we get something more concrete from the meeting here at the end of this week." [Recommended video: Indirect impact of trade war with China is the greatest concern] ​ The series of warnings this week about risks encompasses the trade standoff and other long-running frictions. Societe Generale chairman Lorenzo Bini Smaghi said a hard Brexit could plunge the world into recession and would be a disaster for the financial system. Kristalina Georgieva — in her first major address as head of the International Monetary Fund — warned the global economy is now looking at a "synchronized slowdown." "Gold obviously stands to benefit" if China and the U.S. can't reach a mini deal this week, Adarsh Sinha, co-head of Asia FX and rates strategy at Bank of America Merrill Lynch, told Bloomberg TV Wednesday. Gold futures for December delivery rose 0.6% to settle at $1,512.80 an ounce at 1:30 p.m. on the Comex in New York. Silver also gained, while on the New York Mercantile Exchange, platinum and palladium advanced. The Bloomberg Dollar Spot Index was little changed. [More: Barclays offers first zero-fee ETNs]

Latest News

WallStreetBets takes on the SEC — and makes a surprisingly sharp case
WallStreetBets takes on the SEC — and makes a surprisingly sharp case

The Reddit trading community's formal comment letter against the proposal is drawing widespread attention across finance and tech circles.

Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale
Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale

RIA aggregator adds $4.8 billion in client assets across seven states as demand grows for alternatives to traditional succession models.

Beyond wealth management: Why the future of advice is becoming more human
Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up
Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up

Shareholder targets FS KKR Capital's directors over alleged portfolio valuation and dividend missteps.

UBS loses $1.2 million arbitration claim linked to variable annuities and margin
UBS loses $1.2 million arbitration claim linked to variable annuities and margin

UBS has a history of costly litigation stemming from the sale of volatile investment products.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline