The Hindu Business Line : April shows renewed interest in gold ETFs

Mumbai, May 10 Gold held by the five listed Exchange Traded Funds (ETFs) has posted a five per cent rise in April over the previous month. At end of April, ETFs held 4,130 kg of gold, against 3,930 kg in March.

This is a reversal of the trend seen in the earlier months. Collections since the beginning of the current year took a downturn due to profit booking by investors battered in this year’s equity market turmoil.

April saw renewed interest in gold ETFs due to the exceptionally good performance of spot gold in the month of March, say marketmen. “The investors seem to be chasing the performance of gold. In March, we saw gold prices scaling new highs, which the investors seem to be following in the month of April. This could be one primary reason why there was a jump in the collections of gold ETFs in April,” explained Mr Dhirendra Kumar, CEO at Value Research Online.

“Such Funds are a good bet, especially for those interested in staying invested for the long run,” said Mr Amar Singh, Head of Research Commodities, Angel Broking.

Out of the five listed ETFs, Benchmark’s Goldbees held the highest amount of gold, at 1.35 tonnes as at end April. UTI’s Gold ETF held 1.29 tonnes and Reliance’s fund 1.15 tonnes at April end. On May 7, 2008, Goldbees recorded its highest ever traded quantity in a single day: a total of 91,423 units. This also happened to be Akshaya Tritiya, an auspicious occasion for buying gold.

“The day’s activities were entirely due to the festival as there was no dramatic change in the price of gold,” explained Mr Rajan Mehta, CEO of Benchmark Asset Management Company. “These numbers show a good blend of both traditional customs and modernity,” said Mr Shailendra Kumar, Head-Commodity Research, Sharekhan Ltd.

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