A few days ago, the World Gold Council published data on Gold ETF holdings for June, Commerzbank's commodity analyst Carsten Fritsch notes.

Impact of ETF purchases on prices has waned

"According to this, there was a monthly increase of 75 tons. In the second quarter, net purchases by ETF investors amounted to 170 tons, and in the first half of the year to 397 tons. According to the WGC, these were the strongest ETF inflows in a first half in five years. At that time, the coronavirus pandemic and the subsequent massive easing of monetary policy by central banks were the triggers."

"This time, it was likely the uncertainty caused by US President Trump's erratic tariff policy. The majority of ETF inflows occurred in February, March, and April, when uncertainty surrounding tariffs was at its peak. More than half of ETF inflows in the first half of the year were attributable to Gold ETFs in the US."

"Strong ETF purchases thus contributed significantly to the sharp rise in the Gold price to a record high in April. Recently, however, the impact of ETF purchases on prices has waned. Although the Gold price rose significantly in the first half of June, it remained below its record high and then fell again, resulting in only a marginal price increase at the end of the month."