(Bloomberg) -- Investors pulled out of the second-largest exchange-traded fund tracking gold as climbing interest rates dimmed the precious metal’s appeal as a safe haven.
The $12 billion iShares Gold Trust, known by its ticker IAU, had about $170 million in outflows on Wednesday, the most since March 2017. The ETF has taken in almost three times as much cash this year as its larger competitor, the $36 billion SPDR Gold Shares fund, ticker GLD.
Gold has struggled to hold onto its gains in 2018 as the dollar strengthens and borrowing costs in the U.S. rise, hurting the appeal of the non-interest bearing metal. Data released by the Commerce Department Thursday showed consumer spending in April topped estimates as inflation held at the Federal Reserve’s 2 percent target, keeping policy makers on track to raise rates for the second time this year.
Investors have been pulling cash from IAU since its gold holdings rose to a record 9.4 million ounces in mid-May. The ETF held 9.2 million ounces as of May 30, the latest available data.
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