Investment inflows into gold-backed, exchange-traded funds jumped to an all-time high in the first quarter, boosted by a combination of risk aversion and economic uncertainties, the World Gold Council said on Wednesday. Investors bought a record 469 tonnes in gold ETFs during the quarter, surpassing the previous high of 145 tonnes set in the third quarter of 2008. Total bullion holdings in gold ETFs rose to 1,658 tonnes in the first quarter, WGC said in its quarterly investment report. "Gold has been one of the few assets that has genuinely provided investors with diversification throughout the financial crisis," said Natalie Dempster, head of investment, North America, for WGC. WGC is funded by gold mining companies to promote demand for the yellow metal. Bullion holdings of SPDR Gold Trust, commonly called GLD among traders, was near its all-time high at 1,105.98 tonnes as of April 20. GLD, the world's sixth largest gold holder behind the government of Italy, saw its holdings surge 75 percent in the last 12 months. Gold ETFs are listed on stock exchanges and offer investors exposure in bullion without taking physical delivery. Sponsors of the funds buy a matching amount of physical gold and keep it in bank vaults. Average gold price volatility, on a 22-day rolling basis, dropped to 29.2 percent in the first quarter, down from 44.8 percent in the fourth quarter of last year. Volatility in gold prices was still above its long-term average of 13 percent because of economic uncertainty. However, it remained well below that of the volatile U.S. stock market, measured by the S&P 500 index, at 49 percent in the same period, WGC said. WGC said it will release comprehensive first quarter supply and demand statistics in mid-May in its "Gold Demand Trends" report.

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