SEATTLE (Scrap Monster): The gold prices witnessed phenomenal jump, mainly triggered by global economic concerns triggered by the rapid spread of Covid-19 pandemic. The optimism surrounding the vaccines against the virus has resulted in a rally in global stock indices, suggesting the chances of economic revival. However, it remains unsure as to when the vaccine could reach the entire population of the world. Also, its effectiveness continues to remain as a big question.
It must be noted that gold prices have recorded year-to-date surge of 22%. This is despite the recent sharp fall in prices during the past month, when it had retreated almost 15%, compared with the highs recorded in the month of August.
The holdings in gold ETFs are in excess of 3,700 tonnes at the moment. Any indication of a global economic recovery could trigger sell-off in gold ETFs. Investors are advised to maintain caution before they make fresh purchases. Rather, it would be wiser for them to wait for a price correction, said the latest research report published by Refinitiv Metals.
The reluctance by physical buyers to buy gold aggressively could put more pressure on the yellow metal prices. The latest CTFC data suggests that funds have been trimming down their long positions in gold. Also, global gold-backed ETFs recorded net outflows in the month of November, for the first time in almost a year.