The latest data from the World Gold Council (WGC) shows investment demand in the gold market continued to improve in April. The WGC reported a second consecutive month of inflow into the ETF market, amounting to 15 tons worth $824 million.
North America continues to lead the global market in investment demand. Last month, North American funds received 15 tons worth $984 million. European funds across the Atlantic received 0.7 tons worth $223 million.
As base inflation remains high in Europe and there are issues in the banking sector, investors, anticipating further interest rate hikes by local central banks, have reduced their interest in gold ETFs. Asian funds received a modest inflow of 0.1 tons worth $49 million.
One significant surprise noted in the April report was Turkey, where the inflow was one ton. Currency weakness, increased inflation, and political uncertainty are keeping Turkish investors' interest in gold ETFs.
The WGC suggests that investment demand will continue against the backdrop of recession fears, as a recession implies pressure on stock markets. According to WGC analysts, as gold tiptoes towards historical highs, it simply lacks a catalyst.
A sell-off of stocks could be such a catalyst. Along with the decline in the real yield of bonds and the U.S. dollar exchange rate, the previous level of real yield and the dynamics of gold, which led to the sell-off of stocks, also have some influence.
