Mondo Visione Worldwide Financial Markets Intelligence

FTSE Mondo Visione Exchanges Index: 99,809.16 -203.95

Gold Hits All Time High In EUR And GBP, As Gold ETCs Trade Over USD300m This Week

Date 29/04/2010

  • Gold ETC returns rise as gold price hits a record high of €882/oz in Euro and £764/oz in Sterling, on the back of Greek bond downgrade to junk as ETF Securities' physical gold ETCs trade over $300m this week;
  • Gold returns 15% in EUR and 12% in GBP this year, outshining local equities markets by around 12 percentage points (v STOXX Europe 600) and 8 percentage points (v FTSE 100);
  • Despite USD strengthening by 2.5% since 4 February 2010, the USD gold price has risen by over 9% during the same period and is now hovering just 4% below its all time high in USD;
  • Inflows into ETF Securities' physical gold ETCs have surged 36% over the past 12 months, with its physical gold holdings standing at over 8mn ounces or more than $9 billion.

Comment by Martin Arnold, Senior Analyst at ETF Securities on gold's continued rise:

"The recent downgrades of Greece, Portugal and Spain have highlighted the stark disparity of the growth profiles between the Southern and Northern Eurozone economies. The magnitude of the debt repayments that are scheduled for roll-over by Greece are not large, but the moves in gold suggest investors appear more concerned about the structural cohesion and the potential for contagion to spread within Eurozone. As a result, investors are looking to hold hard assets such as physical gold ETCs to protect themselves from the threat of currency depreciation with physical gold ETCs trading over $300m already this week. With the Euro and GBP declining as sovereign default fears escalate, gold priced in these currencies have reached record highs and even in US Dollars gold is only around 4% below the record highs seen last December. In the current uncertain environment, ETFS' gold ETCs have been an efficient way to capture the upswing in the gold price"