Investors plow money into precious metal ETFs
Fears of a recession are driving investors to safe-haven hard commodity ETFs
Precious metals ETFs are hitting new highs. Macroeconomic factors such as trade wars, fears of a global recession, and political turmoil such as Brexit are fueling the price surge.
Last week, spot gold prices scaled a six-year high of $1,557, while silver perched at a three-year high. Clearly, a flight to safety is happening.
Apart from global growth concerns, investors are seeking to diversify out of highly over-priced bonds and Treasuries at record low yields.
Top-heavy stock markets are also a cause for concern.
Why Precious metals ETFs are Winning
Hedge fund guru Ray Dalio expressed fears of a “paradigm shift” in investor mindset. His reasons ranged from weak central banks and high global debt to weaker earnings.
“I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio,” Dalio said.
Yields on a third of worldwide investment-grade debt amounting $17 trillion are negative, according to Bloomberg.
This phenomenon is making precious metals more attractive to investors both as an alternative diversification and safe-haven shelter.
Funds flood precious metal ETFs
Precious metal ETFs offer a quick and cheap way to invest in precious metals. It’s not surprising therefore to see solid inflows into these funds:
Precious Metal ETF Inflows (YTD)
Ticker Fund Inflows ($M)
GLD SPDR Gold Trust 4,346
IAU iShares Gold Trust 2,160
SLV iShares Silver Trust 1,164
GLDM SPDR Gold MiniShares Trust 423
BAR GraniteShares Gold Trust 208
PPLT Aberdeen Standard Physical Platinum Shares ETF 102
SGOL Aberdeen Standard Physical Swiss Gold Shares ETF 93
DGL Invesco DB Gold Fund 57
AAAU Perth Mint Physical Gold ETF 52
DBP Invesco DB Precious Metals Fund 8
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