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ETF Buying Is Late but Should Keep the Party Going

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Gold ETF buying

Gold ETFs, whose price momentum has been positive, are seeing renewed buying interest from investors. While physical gold buying usually gains momentum from lower prices, ETF inflows usually occur when investors think prices are following an uptrend. The last time ETF buying got a boost was in 2016, when gold prices rose 29%.

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BMO expects ETF inflows to continue

Gold’s global ETF holdings have risen 2.85% to 72.65 million ounces this month, nearing January’s peak of 73.3 million ounces. BMO analysts “expect continued inflows into gold and gold-backed ETFs in the run-up to the July FOMC meeting.” Now that gold has broken $1,400 per ounce, many investors are expected to join in the rally.

Ray Dalio increases bets on gold ETFs

Last quarter, Bridgewater Associates chairman and chief investment officer Ray Dalio increased the fund’s stake in the SPDR Gold Shares ETF (GLD) from 3.91 million shares to 4.03 million shares, and the iShares Gold Trust ETF (IAU) from 11.3 million shares to 11.6 million shares. Dalio suggests investors have 5%–10% of their assets in gold as a hedge.

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