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Fund Flows and Bullish Sentiment in Gold Surged

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Nov. 20 2020, Updated 1:13 p.m. ET

Fund flows to gold

Investors remained bearish on gold in 2015. Gold had been falling for the past three years. It had annual losses. “Absolutely no one saw this coming,” said Ross Norman, Sharps Pixley’s CEO.

Gold saw such a surge in its price that the money flowing into funds like the SPDR Gold Shares (GLD) and the iShares Gold Trust (IAU) increased exponentially. Gold saw the highest inflows in the most famous gold-based fund, the SPDR Gold Shares (GLD), over the past two years. The holdings in these ETFs rose ~21% to 1,761.3 tons. According to data compiled by Bloomberg, it’s the biggest gain in any quarter since March 2009. The trading volumes on COMEX reached 14.1 million contracts—a new record for a first quarter.

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Gold-based mutual funds

Gold was trading at $1,229.6 per ounce on April 5. It increased a whopping 16% on a YTD (year-to-date) basis. The increase in gold also lifted up silver and platinum by 9.2% and 7.1%, respectively, during the same period.

Investors piled into gold at the beginning of the year. They chose gold as uncertainties in China spread across the globe. The rise in gold also helped mutual fund–based investments like the Oppenheimer Gold and Spe Min A (OPGSX), the USGI World Precious Mineral (UNWPX), and the Vanguard Precious Metal and Mining Inv (VGPMX). These three funds rose 37.1%, 41.5%, and 27.8%, respectively, on a YTD basis.

Jeffery Rhodes is epic in the gold industry. He has been trading in gold since 1986. He mentioned that gold trading at the beginning of the year was parallel to gold’s gains in 1986. Now, he’s the CEO of Zee Gold DMCC in Dubai.

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