(Bloomberg) -- As U.S. political turmoil mounted, investors ran to gold.
On Friday, holdings in exchange-traded funds backed by bullion jumped to 71.9 million ounces, the highest since May 2013, according to the latest data compiled by Bloomberg. SPDR Gold Shares, the biggest gold-backed ETF, attracted the most money since September as the Trump-Russia probe escalated.
SPDR Gold attracted $351 million as prices advanced after reports that Trump’s former national security adviser Michael Flynn pleaded guilty to lying to federal agents and would cooperate with investigators. The news sent gold prices surging amid demand for haven assets. The metal pared gains later as deficit hawks opposed to the Senate tax bill vanished, clearing the way for its passage early Saturday morning.
The U.S. political tumult “resulted in higher risk aversion among market participants for a time,” Commerzbank AG analysts including Daniel Briesemann said in a note to investors.
By Monday, haven demand for gold had dissipated, sending gold prices lower as optimism that the tax cut would bolster corporate profits spurred gains in U.S. equities and the dollar .
©2017 Bloomberg L.P.
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