Global investment demand for ETFs surged 51% year-over-year. Total investment demand, though, slightly receded in the fourth quarter, down 16% compared to the record high in the third quarter of 2012.
“As 2013 unfolds, the expectation is for jewellery demand to soften in volume terms while sustaining healthy values,” according to the World Gold Council. “Investment demand, while to some extent dependent on the movement in the gold price during the year and exchange rate effects on local prices, should again exceed historical averages as investors continue to focus on gold’s role as a store of wealth.”
“Continued innovation in the range of gold investment products available across a range of countries (for example, gold accumulation plans in India and China) confirms the healthy appetite for gold among investors,” the World Gold Council added.
Specifically, China is about to launch its first physically backed gold ETF. [China Readying Bullion-Backed Gold ETFs]
According to IndexUniverse data over the year 2012, SPDR Gold Shares (NYSEArca: GLD) attracted $5.7 billion in new inflows, iShares Gold Trust (NYSEArca: IAU) added $2.6 billion and ETF Securities Swiss Gold Shares (NYSEArca: SGOL) gathered $170 million.
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Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.