Gold ETFs are on a Torrid Pace This Month

The SPDR Gold Shares (NYSEArca: GLD) and rival gold exchange traded products are packing on the assets this month as investors continue embracing gold’s safe-haven status. Investors’ renewed affinity for gold exchange traded products is propping up bullion prices, making the yellow metal one of this year’s best-performing commodities.

Gold-related assets have been rallying as global volatility helped support safe-haven investments and a weakening U.S. dollar helped prop up the dollar-denominated hard asset. However, the precious metal is seeing prices fall off as investors dive back into riskier segments of the market.

Still, bullion’s bounce has not convinced all market observers that a sustained rally is in store. Although precious metals ETFs have recently displayed some strength, gold is still in a lengthy bear market, giving some traders pause about how much more near-term upside the yellow metal has in store.

“Demand for gold-backed exchange-traded products is going from strength to strength in February, with Commerzbank reporting inflows of around 50 mt in the last two days, the largest two-day inflow since the Greek debt crisis began in 2010,” according to Platt’s. “ETF inflows totaled 24.4 mt Monday, the German bank said in a report Tuesday, in addition to Friday’s inflows of 25.4 mt.”

Gold is seeing greater support from safe-haven demand after currency devaluations across Asia added to investment demand for a better store of value than paper currencies or stocks and bonds. China and India are the world’s two largest gold consumers. According to the World Gold Council, India imported 891.5 tons of gold in 2014 while demand was 811.1 metric tons. The council believes consumption will increase to between 900 tons and 1,000 tons this year. [India Unlikely to Stem Gold’s Decline]