As gold has climbed impressively in 2016, it’s been attracting investors globally. Gold has surged a whopping 28.7% YTD (year-to-date), and silver has risen by 48.9%. Such immense gains have, of course, attracted investors to these precious metals.
The SPDR Gold Shares (GLD) has also risen by 28.4% YTD and has seen good inflows all year. Although the fund also witnessed outflows in July, the holdings of the world’s largest gold-backed exchange-traded fund saw its biggest one-day inflow since late June on August 1.
As the graph shows, GLD’s inflows were at their highest level after the UK’s Brexit referendum. Uncertainties in the market accelerated when the UK voted to leave the European Union, and investors jumped to haven assets like gold, which gave GLD a boost as well. GLD rose by 0.62% to 969.97 on Tuesday, August 2.
Meanwhile, the Direxion Daily Gold Miners Fund (NUGT) and the ProShares Ultra Silver (AGQ) have seen YTD surges of 609% and 108%, respectively. Remember, the returns of leveraged funds are often amplified compared to the non-leveraged ones.
According to Reuters, the inflows of the six major silver exchange-traded funds rose to a record high of 557.6 million ounces on August 1. Fund flows into famous funds tell a lot about overall investor sentiment. The greater the funds flowing into assets, the better the chances prices may rise in support of the precious metal.
Now let’s discuss the recent impact of the US dollar on gold.