ETFs tracking the rallying gold price reached $239 billion in global assets under management at the end of July, with gold reaching a record highs and surpassing $2,000/oz in the first few trading days of August.

Hector McNeil, co-founder and co-CEO at HANetf, Europe’s white-label ETF and ETC platform, said: “Gold moving over $2k an oz is big news. Given the uncertain times economically and politically, its clear Gold is doing its job as an insurance asset. Many market commentators are predicting further rises in the price of gold, with Bank of America Merrill Lynch (BAML) anticipating it will reach $3k an ounce by early 2022, which seems achievable given the real economic friction is still to come once the true impact COVID-19 on the World’s economy becomes clearer.

“The Royal Mints Physical Gold ETC - RMAU that we manage, hit $350m of AUM this week which is remarkable growth given it was only listed in February. This truly shows investors not only want the safe haven of gold but also want to have the surety it's held in custody with a custodian with unparalleled history and that sits outside the financial system as opposed to a bank vault."

According to the World Gold Council (WGG) gold ETF and similar product had eight months of inflows. Adam Perlaky, manager, investment research at WGG, said ongoing global economic uncertainty and low real interest rates should continue driving gold demand for the remainder of 2020.

"Geopolitical and macroeconomic conditions suggest that strong gold investment demand and price performance will be more of a marathon than a sprint and will likely go the distance in H2 2020," he said.

Chris Mellor, Head of EMEA ETF Equity & Commodity Product Management, Invesco, added: “Investors have looked to gold for two main reasons. First as a safe haven during the COVID 19 crisis, helping to protect portfolios against the potential impact of the recession on corporate earnings and therefore risk assets such as equities or corporate bonds. Second, it is seen as a hedge against inflation: if the economic impact of the crisis proves short-lived, with the degree of stimulus and the size of government debts then there is a risk that inflation could return and a real asset such as gold is therefore appealing.

“Gold supply and demand have both been affected by the crisis restrictions but investment demand has helped to lift prices despite slower jewellery purchases. One other reason for demand for physical gold investments such as our ETCs has been the disruption caused to the futures market. Gold futures continue to trade at a premium to physical metal - the active December future is currently at around a $15 premium to the spot price. This makes investing in gold through futures a much more expensive approach than our ETC.”