Gold prices rise on the back of ETF inflows

Gold held its ground yesterday despite stock market's rally and a steady dollar. In today's session, gold was trading just short of $1,220 per troy ounce. It regained the €1,100 per troy ounce mark, in terms of euro. Renewed inflow of gold ETF's aided the gold price, as gold ETF holdings further increased by 24.4 tons yesterday. Within a two days time the inflows summed up around 50, recording its highest two day inflow since Greek crisis.

Gold inflows have increased since the beginning of this month, surpassing last year's outflows. This year's total gold ETF holdings have summed up to 1,665 tons, marking its highest level in a year. In contrast, palladium ETF's witnessed further outflows as holdings declined by 147,000 ounces since the beginning of 2016. In today's session, palladium was trading below $500 per troy ounce, having touched a two-week low.

"The high ETF purchases should lend further support to the gold price in our opinion" Commerzbank said in a research note.