Friday, 19 July 2013

Economic Times: Gold exchange-traded funds lose appeal as prices tumble

Assets under management of gold exchange-traded funds fell for a third month in a row in June, signalling that investors in the world's biggest consumer of gold are not showering the same affection on paper gold.

Data released by the Association of Mutual Funds in India showed assets under management of gold ETFs at Rs 9,612 crore in June, down 20% from their January peak of Rs 12,057 crore.

Gold ETFs saw a net outflow of 206 crore in June because of profit booking amid concerns of a further decline in gold prices. Analysts say the US Federal Reserve's plan to taper down its quantitative easing programme also contributed to the sell-off in gold funds, adding that gold prices in the near term will remain hostage to incremental positive data from the US.

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