SMM Network News: bank of America (Bank of America) said that the impact of gold ETF on gold prices is becoming greater and greater, and even become a major factor.
Michael Widmer, commodities strategist at the bank, said investors should keep an eye on changes in gold ETF holdings.
"while institutional investors who tend to trade futures still hold a large number of open contracts, retail investors have become increasingly important."
Since the beginning of this year, due to the huge crackdown on the global economy by the epidemic, the surge in risk aversion in the market has pushed the price of gold to an all-time high, breaking the $2000 / oz mark at one point.
At the same time, gold ETF inflows soared and holdings also hit record highs.
During the recent consolidation, gold prices plunged nearly 5 per cent last week, the worst weekly performance since March, while the world's largest gold ETF,SPDR gold ETF (GLD) holdings fell by nearly 1 per cent.
Widmer believes that the difference between the gold futures market and the gold ETF market will lead to differences in gold prices.
"GLD has performed better than the fundamentals several times throughout the summer, with a large inflow, but has recently returned to normal."
Global gold investment demand hit a record in the first half of this year, rising 646 tons, according to (WGC) data from the World Gold Council.
Widmer points out that total global holdings of gold ETF have nearly doubled in the past four years. In addition, nearly 40 per cent of the gold in the (LBMA) vault of the London Bullion Market Association belongs to gold ETF.
In April, Bank of America raised its forecast for gold prices to $3000 an ounce in the next 18 months.
