Slump in global stock markets spurs inflows into gold ETFs

Gold has risen by $50 over the past three days of trading alone and this morning has reached just shy of $1,170 per troy ounce. Over the last two days of trading, the gold ETFs tracked by Bloomberg have seen inflows of 7.1 tons, which constitutes the most pronounced two-day inflow since the end of is worng to assume that prices will continue to perform as they have done in recent days, says Commerzbank. 

The money market for instance has significantly reduced its expectations of a Fed rate hike - according to the Fed Fund Future, a rate hike in September has been virtually priced out, and a rate hike by year's end is regarded as only 75% probable. If interest rate expectations were to shift again, gold could come under renewed pressure. 

US equity indices recorded their sharpest daily falls in 18 months yesterday, the Dow Jones Industrial Average closing at its lowest level in 10 months. The equity markets in Asia have likewise dropped significantly today following the announcement that the Chinese Purchasing Managers' Index had fallen to a 6½-year low. The DAX has already shed more than 5% this week alone and is trading at its lowest level since January, so it is no surprise that investors are rediscovering gold as a safe haven, adds Commerzbank.