LONDON: Gold-backed exchange traded funds (ETFs) shrank in November, ending a year-long buying spree that helped to push gold prices to record highs, the World Gold Council (WGC) said on Wednesday. ETFs, which store gold for investors, reduced their stockpile by 107 tonnes in November, the second biggest monthly outflow on record, the WGC said. That took their total holdings to 3,793 tonnes, worth some $225 billion at current prices.
Even with the outflows, ETFs added 916 tonnes in the first 11 months of the year, significantly more than in any previous full year. Gold prices surged from around $1,500 an ounce at the start of this year to a record high of $2,072.50 in August, driven by rapid stockpiling by investors worried about the economic consequences of the coronavirus pandemic.
But prices have since slipped to around $1,850 as investor demand began to tail off. Gold is traditionally seen as a safe place to park money during times of political and economic turmoil.