Pre-US-election Gold ETC demand set to continue – Source

ETF provider Source has reported a sharp increase in demand for physical gold, with the group’s Physical Gold ETC reporting $500m (€458.7m) in inflows in the week preceding the US presidential elections alone.

Chris Mellor, executive director, Equities Product Management at Source, comments on the trend: “Markets may have been wrong-footed by Donald Trump’s victory but investors in Source Physical Gold were clearly taking out insurance against market volatility in the run up to the US elections.”

Markets responded swiftly to the election results, with the Bullion Vault price of gold quickly shooting up from $40.8 per kg to $42.8 per kg. However, by the end of the first trading day after the election,  gold prices stabilised at $40.9 per kg, almost at pre-election levels.

Nevertheless, Source anticipates that the persistence of geopolitical risk factors will continue to affect demand for physical gold, as Mellor argues: “It is likely there will be further uncertainty around the Italian referendum early next month and French and German elections next year. That is before we even consider what will happen in the US in the coming months and years. In such an environment, the advantages of a large, liquid and low cost product are very attractive.”

Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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