Bank of America: Gold funds see the largest weekly inflow in nearly a year
Bank of America cited data from EPFR, stating that in the week ending this Wednesday, $1.1 billion flowed into gold funds, the highest level since May 2023. On Wednesday, the Federal Reserve kept interest rates unchanged, while on Thursday, the Bank of England indicated that the UK economy is moving towards a rate cut, and the Swiss National Bank unexpectedly cut rates by 25 basis points. Bank of America believes that major central banks are gradually shifting towards rate cuts, supporting market trends and explaining why assets such as stocks and gold are at historical highs. The price of gold has room to rise as several central banks continue to buy gold. Against a backdrop of geopolitical uncertainty, the attractiveness of gold as a safe-haven asset has driven demand for gold
According to the Zhitong Finance and Economics APP, Bank of America cited data from EPFR, stating that in the week ending this Wednesday, $1.1 billion flowed into gold funds, the highest level since May 2023.
On Wednesday, the Federal Reserve kept interest rates unchanged as expected, while reiterating the expectation of three rate cuts by the end of the year. On Thursday, the Bank of England indicated that the UK economy is moving in the right direction towards a rate cut. The Swiss National Bank unexpectedly cut rates by 25 basis points on Thursday, becoming the first economy in the G10 to cut rates.
Bank of America stated that major central banks are gradually shifting towards rate cuts, supporting market trends and explaining why nominal assets such as stocks and gold are at historic highs. In a report, Bank of America said, "Major central banks tolerate rising inflation, do not tolerate currency appreciation, desire a soft landing, but also hope to alleviate the burden of the record $82 trillion global government debt."
The price of gold seems to have room for further increase, as several central banks continue to buy gold on a record scale. Shaokai Fan, Global Central Banks Director at the World Gold Council (WGC), said: "Central banks around the world have bought gold at record levels in the past two years and will continue to be strong buyers in 2024." Against a backdrop of geopolitical uncertainty, the attractiveness of gold as a safe-haven asset has driven strong physical demand for gold.
Bank of America also pointed out that in the week ending this Wednesday, US stock funds saw outflows of $22 billion, and cryptocurrency funds also saw outflows of $100 million