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Gold Funds Underpin Pandemic Price Rally as Jewelers Vanish

  • U.S., European ETF demand eclipses top Asian consumers’ buying
  • Chinese and Indian gold purchases have plunged this year
Scrap Gold Collection
Photographer: KevMaw/iStockphoto

Western investors piling into gold in the pandemic are more than making up for a collapse in demand for physical metal from traditional retail buyers in China and India, helping push prices to an eight-year high.

Inflows into exchange-traded funds this year –- mostly in North America and Europe –- are already inches away from the annual record set in 2009, according to data compiled by Bloomberg. Meanwhile, demand in China and India, the world’s two biggest buyers of gold bars, coins and jewelry, plunged after the coronavirus stalled imports and emptied malls. Sales have been slow to return as rising prices deter buyers.