18.07.201915:26 Forex Analysis & Reviews: Yellow metal at the peak of demand – WGC

According to the World Gold Council (WGC), published last week, the most significant inflow of investors in the yellow metal was recorded in the ETF sector. Along with this, the growth in demand for precious metals was noted by the leading central banks.

Last month, the gold reserves of ETF-funds increased by 127 tons, up to 2548 tons. Against the background of the price rally, capital inflows in ETF stocks rose by 15% to $ 115.4 billion, which is the maximum since 2012. The largest cash inflow was observed from the USA (51%) and from Europe (47%). The rest is in Asia (1.7%) and other countries (0.3%). In the first half of 2019, the net flow of gold into ETF funds reached 107.5 tons.

Shares of the "gold" ETF from the UK were very popular among investors. Experts explain the growing demand for gold in the UK by a number of reasons: the uncertainty regarding Brexit, geopolitical risks, the potential reduction in interest rates from the Fed.

According to the WGC, there is currently a boom in demand for gold on the part of world regulators. In the first half of 2019, the volume of total gold reserves of the leading central banks increased by 36 tons, which is 27% less than the previous month. The volume of net purchases of precious metals by the Central Bank amounted to 247.3 tons, which is 73% more than in the same period of 2018.

Experts point out a number of countries whose central banks are especially actively increasing their gold reserves. First of all, they include the Central Bank of Russia (over 75 tons), the People's Bank of China (over 60 tons) and the Central Bank of Turkey (about 50 tons). Experts believe that such a strategy of leading regulators should demonstrate to private investors the special significance of gold reserves. The yellow metal has the most important function of preserving savings in the long term, unlike national currencies, which are subject to inflation and other risks, experts remind.