Global gold holdings hit 7-year high as Wuhan virus drives investors to safe havens

Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Germany on Aug 14, 2019.
Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Germany on Aug 14, 2019.PHOTO: REUTERS

SINGAPORE (BLOOMBERG) - The global stash of gold held in exchange-traded funds (ETFs) has hit the highest level in seven years as the spread of the novel coronavirus spurs investors to beef up holdings of haven assets, and the addition of just a few more tons would lift the total to a record.

The latest influx follows four straight years of inflows into bullion-backed ETFs, and comes as prices trade near the highest since 2013. The number of confirmed virus cases in China has soared to overtake the official number of infections during the Sars epidemic, and at least 132 people have died.

Spot prices were little changed at US$1,567.22 an ounce on Wednesday (Jan 29), up 3.3 per cent in January, after an 18 per cent jump last year, the biggest annual gain since 2010.

Gold has risen this year as the outbreak of the deadly virus, which began in the city of Wuhan, threatens to hurt the world economy, prompting volatile equity trading amid swings in investing sentiment. The traditional haven has also been in favor as the Federal Reserve has signaled that interest rates are likely to remain low for some time.

Worldwide gold holdings in ETFs rose to 2,561.2 tons as of Tuesday, the highest level since January 2013, according to data complied by Bloomberg. They peaked at 2,572.8 tons in December 2012.