European investors are leading the race to gold as concerns over growing populism and protectionism embraced by Donald Trump fuel demand for haven assets.
The four exchange-traded funds backed by the metal that have attracted the most money this year are all based in Western Europe. Frankfurt-listed Xetra-Gold tops the list, bringing in about $544 million last week, the biggest weekly inflow since at least 2012, according to data compiled by Bloomberg. That’s more than 10-times the new money added into SPDR Gold Shares, the largest commodity ETF, data show.
European investors are piling into gold, fueling the metal’s rebound, amid concern that Trump’s “America first” rhetoric and plans to scrap regional trade deals will impede global economic growth.
Adding to the anxiety is the impact from Britain’s exit from the European Union and the growing popularity of anti-establishment politicians running in this year’s elections in Germany, France and the Netherlands.
“People just want to be on the safe side,” Michael Blumenroth, a Frankfurt-based analyst at Deutsche Bank AG, said in a telephone interview. “If they see stock markets going down, then people think that gold will at least be an insurance. There’s a lot of uncertainties and that’s exactly driving the purchases of gold ETFs not only in Germany, but in London as well.”
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