Daily Gold Market Report

The Dynamics of Investment:
Gold and Bitcoin ETFs in the Post-Pandemic Era

(USAGOLD – 3/25/2024) In early trading on Monday in the U.S., gold prices strengthened, buoyed by positive external market factors, including a weaker U.S. dollar index and slightly increased crude oil prices. Gold is trading at $2177.82, up $12.38. Silver is trading at $24.79, up 11 cents. The Financial Times recently disscussed the relationship between the outflows from gold exchange-traded funds (ETFs) and the inflows into bitcoin ETFs, addressing the speculation that the rise of bitcoin ETFs might be causing a decline in gold ETF investments. JPMorgan’s research indicates that this is not the case; the outflows from gold ETFs began in April 2022 and have continued steadily, unrelated to the emergence of bitcoin ETFs. Despite the outflows, central banks and private investors continue to invest in physical gold, driven by a desire for privacy and tangibility, especially post-pandemic. While bitcoin ETFs have seen significant inflows, there has been a simultaneous sell-off of bitcoin held directly on exchanges, suggesting a shift rather than new investment. The overall demand for both gold and bitcoin appears to be influenced by momentum traders, and the World Gold Council and Morningstar analysts concur that investment in gold remains robust when considering all forms of investment, not just ETFs.