Gold-backed ETFs See Largest Inflows Since Early 2017


Over the long-term, the main driver for gold prices is the expansion of wealth, according to Juan Carlos Artigas, director of investment research at the World Gold Council.

Juan Carlos Artigas Outlines Demand Drivers for Gold

Gold prices ticked $2 higher Monday to $1,292.74 an ounce. In an interview with Kitco, Artigas explains,

“When you look at the gold market, and in particular try to understand the drivers, of growth, over the long run, wealth and economic expansion are really, really important and they drive fiscal demand.”

Kitco host Daniela Cambone opens with the statement that,

“Gold-backed ETFs are seeing their largest inflows since April 2017.”

On the sidelines of the Mines & Metals Conference in New York, Artigas adds that higher interest rates may not necessarily mean lower gold prices.

Furthermore,

“Historically, higher interest rates do not necessarily result in falling gold price, because interest rates would need to be really high in real terms, at least 2.5% real, for them to properly start creating pressure.”

Finally,

“Wealth and economic expansion often happen in rising rate environments, so you have that counterbalance.”

 

Gold prices may be down of late, but with production declines expected from the 5 largest gold producers in 2018, higher prices may be coming. Click here to learn about how rising production has not been replaced with successful exploration in recent years.