Gold exchange traded funds are regaining some safe-haven demand as traders pushed up bullion to its highest in four weeks in response to rising volatility in the equities market.
Gold-backed exchange traded products saw holdings increase by 3.7 metric tons Monday to 1,666 tons, the first increase in two weeks, Bloomberg reports.
“(Our) gold exchange-traded products saw their first inflows in a month as dovish Federal Open Market Committee minutes led to dollar weakness, while weak German data renewed interest in the hard defensive assets,” Danny Laidler, head of the ETF Securities’ Australia & New Zealand operations, said in a Reuters article.
Gold prices touched a four-week high Tuesday, hitting an intra-day high of $1,238.6 per ounce, their highest since September 17, reports Ira Iosebashvili for the Wall Street Journal.
COMEX gold futures are now trading around $1,233 per ounce.
“Gold wasn’t interesting for many investors because they could invest in stocks, but right now, the fact that the gold price can be a hedge against stock market turmoil is coming back into the minds of investors,” Thorsten Proettel, a commodity analyst at LBBW, said in an Economic Times article.
Growth concerns over the Eurozone helped support gold prices. For instance, factory output from the union declined in August and Germany’s ZEW institute did not rule out a recession in for the Eurozone’s largest economy.