Why Gold Prices Have Hinged on the Dollar (Part 3 of 3)
Why Gold’s Fund Flows Surged Last Week By Meera Shawn • Mar 30, 2016 10:54 am EDT Gold’s fund flows
Gold saw strong inflows last week even as its safe-haven appeal faded with the rise of the US dollar and the fall of commodities. The inflows to gold-related ETFs continued, suggesting confidence in the bullion markets. The SPDR Gold Shares ETF (GLD) and the iShares Gold Trust (IAU) have risen in 2016 in tandem with gold prices. These two funds have risen 17.1% each on a YTD (year-to-date) basis. On Thursday, March 24, GLD’s holdings rose to their highest level since December 2013 to reach 26.5 million ounces.
Enlarge Graph South-African miners rise
According to data from the US Commodity Futures Trading Commission, money managers increased their bullish bets on gold following the Brussels attack, with gold rising nearly 1% on safe-haven demand.
The miners that have risen since the beginning of 2016 due to the rise in precious metals include Sibanye Gold (SBGL), Gold Fields (GFI), and AngloGold Ashanti (AU). These three South-African miners have risen 158%, 43.6%, and 96.5%, respectively, on a YTD basis. These miners have mostly benefited from the weakness in their domestic currency, the rand, against the US dollar. These three miners make up 10.6% of the Market Vectors Gold Miners ETF (GDX).
According to data released by the International Monetary Fund on Friday, March 25, Russia and Kazakhstan added to their bullion reserves in February, while Malaysia and Turkey cut their bullion reserves.
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