UNITED STATES February 25 2016 7:06 AM

NEW YORK (Scrap Register): Inflows into exchange-traded funds are providing much support for gold, said HSBC.

The ETFs trade like a stock but track the price of the commodity, with metal put into storage to back shares. 

“Gold rebounded from early-week liquidation and bullion’s ability to hold above $1,200 an ounce is impressive, in our view,” said analysts at HSBC. “The longer it does so, the stronger a base it will build. A major shift in the market this year is the recovery in gold-ETF holdings.” 

Holdings in SPDR Gold Shares, the world’s largest gold ETF, this week hit their highest level since March 2015. Not all indicators are gold-bullish at the moment, such as steep discounts in India, HSBC added. 

Still, “as long as gold-ETF demand holds up, we believe the gold rally can be sustained,” the bank noted.