/Largest gold ETF inflows in three years boosted demand for yellow metal in the third quarter

Largest gold ETF inflows in three years boosted demand for yellow metal in the third quarter


KIM JAE-HWAN/AFP/Getty Images

Pure 1,000-gram gold bars.

A surge in speculation led to an increase in gold demand in the third quarter, according to a World Gold Council report released Tuesday.

Exchange-traded fund inflows shot higher by the largest amount since the first quarter of 2016, in what the council attributed to accommodative monetary policies, safe-haven and momentum buying. During the third quarter, the Federal Reserve cut interest rates twice, and the European Central Bank cut interest rates in a package of easing measures.

Leading gold ETFs include the SPDR Gold Trust

GLD, -0.29%,

iShares Gold Trust

IAU, -0.21%

  and the Aberdeen Standard Physical Swiss Gold Shares ETF

SGOL, -0.27%.

Overall gold demand rose just 3% during the quarter, as jewelry demand shrank by 16% as the yellow metal’s prices rose.

Gold futures

GC00, -0.66%

 were holding above the $1,500 an ounce level on Tuesday and have climbed by 19% over the last 12 months.

Central-bank buying fell by 38%, as the third quarter of 2018 featured the highest amount of buying on record. Bar and coin demand dropped by half.

The gold supply rose by 4%, helped by a 10% increase in recycling.

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