As geopolitical tensions rise investors are increasingly turning to safe haven assets like gold, with exchange-traded funds (ETFs) focusing on the precious metal and its miners seeing $3.3 billion of inflows since August.
According to the economics outlet Kobeissi Letter on the microblogging platform X (formerly known as Twitter), the most popular gold ETF, SPDR Gold Shares (GLD), has seen cumulative inflows of $644 million year-to-date.
This ‘historically high demand’ has meant gold is on tract to have its best annual return since 1979, as it’s currently up 28% year-to-date to now trade at $2,645 per ounce. One year ago, the precious metal was at little over $1,800.
The outlet also noted that ETFs focusing on gold miners, the VanEck Gold Miners ETF and the VanEck Junior Gold Miners ETF, are up over 30% and “on track for their best year since 2020.”
Per the outlet gold is trading “like we are in a crisis.” The price of the precious metal is surging at a time in which the total money supply in the United States, the Eurozone, Japan, and China has for the first time in history reached $89.7 trillion, having skyrocketed by a whopping $7.3 trillion over the past year.
Gold’s latest rise came after Iran fired around 180 ballistic missiles at Israel in what Iran’s Revolutionary Guard Corps said was a retaliation for the assassinations of Hamas’s political leader and an Iranian commander.
Notably, Societe Generale has shifted 100% of its commodity allocation to gold, driven by geopolitical risks and a weakening broader commodity market.
The French bank increased its gold holdings to 7% of its total asset allocation, reflecting a 40% quarter-over-quarter rise. This pivot toward gold signals growing confidence in the yellow metal as a safe-haven asset amid ongoing uncertainties in global markets.
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