Physically backed gold exchange traded funds have rallied this year and attracted billions in inflows, stockpiling gold bars in storage that is second only to official United States reserves.

The SPDR Gold Shares (NYSEArca: GLD) is the second most popular ETF play of 2020, attracting $19.6 billion in net inflows year-to-date, according to ETFdb data. Additionally, the iShares Gold Trust (IAU) brought in $7.4 billion in net inflows and the SPDR Gold MiniShares (NYSEArca: GLDM) saw $1.6 billion in inflows.

Since these are physically backed fund strategies, these gold ETFs would have to increase physical gold holdings or hoard more gold bullion in response to the increased ETF creations.

Worldwide holdings in gold-backed ETFs surged to 3,365.6 tons on Monday, or up 30.5% this year, Bloomberg reports. This means that global gold ETFs now hold more gold than Germany’s reserves, but gold ETFs are still short of the official U.S. reserves numbers that exceed 8,000 tons.

Comex gold futures are now trading around $2,034 per ounce. Even after topping $2,000, there are plenty of forecasters projecting further substantial price gains. For example, Goldman Sachs Group Inc. believed gold could climb to $2,300 as investors are “in search of a new reserve currency,” while RBC Capital Markets puts the odds of a rally to $3,000 at 40%.

Gold has been a popular play for investors to hedge against ongoing volatility, uncertainty and inflationary risks. The coronavirus pandemic has ravaged economies and fueled heightened uncertainty, which has in turn helped support gold as a safe-haven bet. Meanwhile, the copious amounts of fiscal and monetary stimulus measures have inundated the markets with cash, fueling demand for physical assets like hold that can help investors maintain their purchasing power.

Looking ahead, ongoing risks like geopolitical tensions, rising government debt burdens elevated equity prices and the presidential election can all contribute to increased gold demand.

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