George Milling-Stanley, Head of Gold Strategy at State Street Global Advisors, said as of Sept. 6, year to date inflows into GLD total $968 million, taking the fund to a total valuation of over $36 billion.
“The increase in GLD assets year to date has been about 3%,” Milling-Stanley said. “The gold price has risen 15% since the beginning of the year, and as long as the price continues to strengthen, I would expect continued inflows into GLD, the clear market leader among gold-backed ETFs. We are seeing a combination of safe haven buying in the face of geopolitical and macroeconomic uncertainties, coupled with continued strategic allocations to gold by both individuals and institutions. The current environment is very supportive for gold.”
According to the World Gold Council’s recent August data, European gold-backed funds account for 79% of the global growth in 2017.
Artigas said European funds have been surging and taking global market share since 2016, adding its their view this can be attributed in part to three reasons.
“First, higher sensitivity to global risks by European investors – as their local stock and bond markets tend to be smaller than those in the US, forcing them to generally invest more abroad thus incurring higher currency risk exposure than their American counterparts,” he said. “Second, an expansion of the broader ETF market in Europe as more investors embrace these vehicles as viable alternatives to more traditional fund structures.”
Finally, Artigas said a change in the German fiscal treatment for gold-backed ETFs in late 2015 that removed capital gains taxes on holdings periods of more than a year, putting them from fiscal perspective on a more equal footing to gold bars and coins.
“As a consequence, 50% of European inflows so far in 2017 have come from German-listed funds,” he said.
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