Asian Appetite for Gold Stays Firm Even as U.S. ETF Holders Retreat
In a fresh note, Bloomberg macro strategist Simon White examines the gap that has opened up between gold buying in Asia and in the West. He made a point to a growing geographic split in the market: Purchasers across Asia keep buying, while those in the US and Europe are treading more carefully.
Gold has been working to build a floor above the $4,100 floor. The metal rebounded off $4,000 last week as reports of an Iran peace agreement with the U.S. filtered through the trading desks. What made the recovery stand out was its timing, it unfolded even as appetite from Western ETFs slowly continued to fade.
Nowhere is that strain more obvious than in the ETF space. Redemptions from the ETF gold funds in the U.S. keep mounting. White also pointed out that withdrawals from Bitcoin ETFs have begun to slow, which could hint that some investors are warming back up to crypto, though he warns against leaning too heavily on that read.
Across Asia, the picture looks quite different, however. At the moment, Hong Kong and India are pulling in more Swiss gold than any other destinations. Given that Switzerland tops the list of global gold exporters, those shipments offer a telling clue about where physical buying is clustered.
While White acknowledges that Asia's gold ETFs remain modest in size next to their Western equivalents, but the point is that gold recent weakness in price action didn't really reduce the demand coming from that region. And the consistent demand from Asia might open up the next catalyst in gold price action.
Related assets: Gold, Silver, Palladium, Platinum