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Net inflows to SPDR Gold Shares surged to a new record of $1.63 billion, the highest since it went public in 2004. The surge in net inflows to one of the largest gold exchange-traded funds (ETFs) comes amid falling cryptocurrencies and stocks.
Investors are more bullish on gold
SPDR Gold Shares, one of the world’s largest gold-backed ETFs, recently recorded net inflows of $1.63 billion, the highest since it went public in 2004, a report said. Friday’s record inflows could signal investors’ growing bullishness on gold as stocks and cryptocurrencies have been plunging, the report said.
As recently explained by Bloomberg Report, the surge in net inflows to SPDR Gold Shares was equivalent to 27.6 tonnes of the precious metal. SPDR Gold Shares’ ETF net inflows surge as the world braces for the Fed to resume raising interest rates, according to previous Bitcoin.com news Report, which appears to be heading towards an end to major asset purchases.
In addition to an imminent rate hike by the Federal Reserve, growing global tensions over Russia’s planned invasion of Ukraine also boosted demand for gold.
static price of gold
However, despite the increase in net inflows into gold ETFs, the Bloomberg report cited analyst Daniel Bresemann as saying he was surprised that the precious metal failed to profit from the strong inflows into ETFs.
“We are very surprised that gold prices have not been able to profit from strong ETF inflows. Market participants are likely to focus mainly on the Fed meeting this week,” explained Commerzbank analyst Briesemann.
While gold is seen by many as a reliable alternative store of value, as its price nears the end of 2021, gold cannot protect holders from the Fed’s quantitative easing policy four percent lower than it starts. In contrast, Bitcoin and other cryptocurrencies ended the year with double-digit gains or more.
However, as cryptocurrencies and stocks continue to slide, some investors are once again considering holding the precious metal. At the time of writing, gold was trading around $1,842 an ounce, nearly 1% higher than $1,828 on Dec. 31.
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