The World Gold Council argued that geopolitical tensions contributed to the ongoing flows into gold-backed ETFs. For example, investors focused on the ongoing rise in anti-establishment parties associated with growing populism across Europe, along with the potential outcomes of elections in Netherlands and France, especially in the wake of the unexpected Brexit vote.

Investors may have also turned to the cheaper gold as a potential value play and a portfolio diversifier in a traditional stock and bond position.

“Negative real and nominal yields coupled with a period of relative calm in regional stock markets improved the appeal of gold, particularly as its price strengthened through the quarter. The dips in the eurodenominated price of gold in January and March were also taken as a good opportunity to add it to portfolios,” according to the World Gold Council.

In the U.S., gold also reacted positively to the Federal Reserve’s more dovish monetary policy guidance when it raised rates in March on expectations around future increases in U>S. rates eased slightly.

Traders were also wary of ongoing risks given the global geopolitical and economic backdrop, especially with the crisis in Syria, ongoing uncertainty over Brexit, a slowdown in China, deteriorating relations between the West and Russia, and tensions over North Korea’s nuclear program.

Physical gold has also found support out of the emerging markets, notably China where retail investment was up 30%, breaking above 100 tons for the fourth time on record. Jewellery demand was also steady and marginally higher year-over-year on slightly higher demand out of India.

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