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Gold-backed ETFs reach new heights as global demand falls

World Funds SmallHoldings in gold-backed ETFs reached new heights in the third quarter despite an overall fall in global gold demand.

While global demand fell by nearly 20% year-on-year in Q3, investors added over 270 tonnes to gold ETFs bringing holdings to a new record of 3,880 tonnes, according to data from the World Gold Council. 

Elsewhere, the gold market suffered as the impact of Covid-19 continued to make itself known. Global gold demand hit its lowest quarterly total in over 10 years, while total supply also fell by three per cent year-on-year. 

Louise Street, market intelligence at the World Gold Council, said a combination of social restrictions in many markets, economic uncertainty, and “all-time high” gold prices was too much for many gold buyers – and this was a trend set to continue. 

“However, looking to the investor landscape we saw further record inflows into gold-backed ETFs in Q3, taking the global total to a record high,” she added. “It was equally encouraging to see gold’s role as a safe-haven for retail investors shine through this quarter, as people continue to seek stability in volatile markets.”

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