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The safe-haven demand for gold has triggered a strong inflow into gold-backed ETFs this year. Worldwide holdings in gold-backed exchange-traded funds now stand behind only the official US reserves of bullion after they surpassed Germany’s holdings, according to Bloomberg.

Worldwide holdings in gold-backed ETFs rose to 3,365.6 tons on Monday, up 30.5% this year, according to preliminary data compiled by Bloomberg. That’s a couple of tons ahead of Germany’s stash. US gold reserves exceed 8,000 tons.

Gold has rallied to a record this year as investors looked for safe-haven assets amid the coronavirus crisis. This has spurred massive inflows into gold-backed ETFs. Gold futures have topped $2,000 an ounce, logging about 30% gains this year.

Despite the massive gains, many analysts forecast of further gains. Goldman Sachs Group Inc. says gold may climb to $2,300 as investors are “in search of a new reserve currency," while RBC Capital Markets puts the odds of a rally to $3,000 at 40%.

Coronavirus cases continue to surge in the United States and elsewhere. The World Health Organization warned that the road to normality would be long, with some countries requiring a reset of strategy.

Central banks around the world have rolled out a flurry of stimulus measures and cut interest rates to mitigate the economic damage caused by the pandemic, supporting gold's rise. Gold is seen as a hedge against inflation and fears of currency debasement.

Meanwhile, U.S. lawmakers said they had made progress in talks on a new coronavirus relief bill.

"Investors have embraced gold in 2020 as a key portfolio hedging strategy. Looking ahead, expectations for a faster recovery (V-shaped) from COVID-19 are shifting towards slower recovery (U-shaped), or potential setbacks from additional waves of infections (W-shaped). Regardless of the recovery type, the pandemic will likely have a lasting effect on asset allocation. It will also continue to reinforce the role of gold as a strategic asset," World Gold Council said in a recent report. (With Agency Inputs)

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