Investors withdrew massive amounts of money from gold ETFs in the first quarter, with these exchange-traded index funds selling a total of 215 tonnes of gold between January and March, according to a report by Handelsblatt. As a new infographic from Kryptoszene.de illustrates, demand for physical gold remains greater than ever. One possible reason: fears among investors of an imminent crash, and an associated desire to physically hold the coveted metal in their own hands.
Gold enjoys particular popularity in Germany, with one in four German citizens claiming to hold stocks of the metal. Especially at the start of the Corona crisis, they rejoiced in a gold price rally, although calm has since returned.
The gold holdings in the world’s largest gold ETF have now been on the decline for fourteen weeks. As shown in the infographic, this also applies to major silver ETFs, although the outflow here has been significantly lower.
ETF Trend
Nevertheless, results from the study clearly show that ETFs are by no means in a downward spiral. Quite the contrary: they are growing in popularity, and investors are increasingly opting for savings plans. According to data from the asset manager BlackRock, there were 2 million active ETF savings plans in Germany last year. This number is expected to rise to 9 million by 2025.
It remains to be seen whether and to what extent gold ETFs will hold their value in the coming months and years. However, there seems to be a lot to suggest further growth. In a time of economic uncertainty and risk of inflation, gold investments can be a sensible means of diversification.
