cryptocoin.com As you can follow in the news, the US inflation, which reached the highest level in 31 years, directed investors seeking protection from inflation to the gold market last month. However, the momentum did not last as prices failed to hold above $1,800, according to the latest data from the World Gold Council (WGC).
After a long time, November is the first month to enter the gold ETF market
In its latest market report, WGC announced that products traded on the global gold exchange saw a total entry of 13.6 tons in November. This was the first month of entry the gold ETF market has seen since July. Analysts make the following assessment in the report:
Both North American and European gold ETFs contributed to the November inflows. The headwinds that larger funds in these regions have faced for much of this year have been reversed.
However, despite the surge in ETF demand last month, WGC describes gold’s price action as neutral, with a 2% month-on-month increase.
The precious metal is down more than 4% for the year as sustained rise in prices has not materialized since June, especially given monetary fluctuations and stable dollar strength. Gold closed the month 2% higher as inflation expectations rose to the highest level since 2005 in the first half of November.
“Uncertainty will continue to support precious metals investment”
WGC notes that while rising inflation has been supportive for the gold market, price pressures have been met with hawkish comments from the Federal Reserve. Looking forward, WGC states that inflation and US interest rates will continue to be the two dominant drivers for the precious metal:
This year, we believe that many of the factors driving gold will remain important in 2022: the pace and direction of inflation and interest rates, the resilience of Covid and global economic growth. Uncertainty will continue to provide some support for yellow metal investment as a hedge.
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