Buying Gold: Futures and Physical Metal In, ETFs Out

LONDON (Reuters) – Gold prices are ignoring dwindling inflows into bullion-backed exchange-traded funds, with prices supported as investors switch their interest to the U.S. futures market and outright purchases of physical metal.  Investors are increasingly embracing riskier assets like stocks, leaving less of an impulse to hoard gold as a hedge against the unknown, lending support to its appeal as a buffer to dollar weakness and future inflation.  Consequently, while interest in gold-backed ETFs has tailed off after unprecedented buying in the first quarter, other forms of investment, such as positioning on the New York Comex futures exchange, have increased and underpinned a firm price.

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