David Fickling, Columnist

Fear Not, ETFs Control the Price of Gold

It isn’t so much sentiment that drives the metal’s value. Passive products dictate, rather than track, performance.

October 12, 2018 at 6:19 AM UTC

David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

Wisdom of the masses.
Photographer: Carla Gottgens/Bloomberg

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Gold isn’t like anything else on the market. Ancient, fundamental, eternal – it’s different from all those here-today, gone-tomorrow assets such as Snap Inc. shares and cryptocurrencies. Right?

Wrong. Thursday’s surge in the spot gold price – a 2.5 percent jump to $1,224 an ounce, its sharpest leap in more than two years – looks like confirmation of a trend that’s been developing for a while. The driver isn’t so much time-honored fears about the value of money, but the behavior of exchange-traded funds.