Investors have plowed into gold ETFs, with holdings in bullion-backed products surging to their highest level in six years over August, in response to the heightened uncertainty and market risks.

For example, among the most popular gold-related ETFs, the SPDR Gold Shares (NYSEArca: GLD) attracted $2.6 billion in net inflows over August while the iShares Gold Trust (NYSEARCA: IAU) brought in $894 million and Aberdeen Standard Physical Swiss Gold Shares ETF (NYSEArca: SGOL) saw $65 million in inflows, according to ETFdb data.

Investors bought a total of about 101.9 metric tons of gold through ETFs last month or about $5 billion in August, the Financial Times reports. Total ETF holdings went up to 2,453 metric tons, their highest level since February 2013, and it was the third consecutive month of net buying.

Gold Stands Strong

Gold was one of the best-performing assets last month, strengthening 8% and touching its highest level since April 2013 after President Donald Trump escalated the trade war and announced additional tariffs on Chinese imports. Gold prices have strengthened about 20% this year to $1,564 per ounce.

“The slowdown is happening; the question is does that end in a recession? And when do you think it ends in a recession? That is clearly one of the worries,” George Cheveley, a fund manager at Investec, told FT.

Brian Jacobsen, a senior investment strategist with Wells Fargo Asset Management, argued that some of the recent demand was prompted by a so-called terror-trifecta trade, or betting on a pullback in stocks along with a rise in gold and U.S. Treasuries.

“With all the troubles in the world, from US-China trade relations to the Brexit brinkmanship we’ve found a terror-trifecta trade to be pretty attractive,” Jacobsen told FT.

The swift decline in bond yields globally last month also added to gold’s appeal since depressed yields lowers the so-called opportunity cost of holding a hard asset that provides no yields.

Related: Big Gold Miners ETF Sees Unusual Options Activity 

Looking ahead, investors now anticipate the Federal Reserve to continue its rate cuts in September to further bolster economic growth.

It is “just a question of how large this will be”, Jon Butler, an analyst at Mitsubishi Corp, the Japanese trading house, told FT. “This should continue to put downward pressure on bond yields and make gold look more attractive to investors, plus further escalations in the trade wars will help haven sentiment.”

For more gold investing news and strategy, visit our Gold category.

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