The last known gold deposit

August 8, 2016 01:48 PM

Massive inflows into gold funds

In the meantime, gold continues to find support from global monetary policy and low to negative government bond yields. Last week the Bank of England cut rates as part of a stimulus package, which both weakened the British pound 1.5% and gave the yellow metal a jolt.

These gains were erased, however, following Friday’s better-than-expected U.S. jobs report, which sparked a rally in Treasuries. This contributes to the narrative that gold and government debt are inversely related, a key component of the fear trade.

When priced in the local currencies of the U.S., Canada, South Africa or Australia—four of the largest gold-producing countries—bullion is up, which has boosted miners’ profits. Gold stocks, as measured by the NYSE Arca Gold Miners Index, have appreciated 128.92% in the last 12 months. 



For the first half of 2016, inflows into commodities have been the strongest since 2009. Gold and other precious metals account for about 60% of the new money, which has pushed commodity assets under management above $235 billion. Barclays believes 2016 could be the best year on record for gold-related exchange-traded funds and other funds, with many big-name hedge fund managers, from Stan Druckenmiller to Paul Singer to Bill Gross, singing the praises of the yellow metal.  

Page 4 of 4
About the Author

Frank Holmes is CEO and chief investment officer of US Global Investors. This first appeared in his Frank Talk blog. For more updates on global investing from Frank and the rest of the U.S. Global Investors team, follow on Twitter at www.twitter.com/USFunds or like on Facebook at www.facebook.com/USFunds.