Trading in ETF Securities (ETFS) exchange traded commodities (ETCs) has hit an all-time high of $1.4bn (£971m) in a single month after demand for gold rocketed.
The gold price hit all-time highs against the dollar and euro in May, amid fears over the stability of developed-world currencies.
The trading frenzy has pushed the total gold holdings in ETFS physical gold ETC funds to 8.4m ounces or $10.5bn – the largest exchange traded fund (ETF) gold holdings in Europe and the second-largest in the world.
The group said in a statement to investors: "Trading volumes in ETCs are up over 90 per cent over the past month.
"Seventy per cent of the rise is due to a surge in precious metals trading, with 50 per cent attributable to gold.
"The rise appears part of a broader rise in market trading over the past few weeks and – in particular – strong demand for gold ETFs."
The group said the gold demand reflected a shift out of currencies and risk-assets like equities amid fears over government debt levels in Europe.
"The rapid deterioration of eurozone sovereign fundamentals has renewed investors' appetite for hard assets, particularly precious metals, as investors look to reduce their exposure to counterparty and currency depreciation risks," ETFS said.
"The gold price has been hitting successive new highs in euros, pounds and Swiss francs, but until May 11 had remained below its previous all-time high set in December 2009."
While gold proved popular, ETFS also attributed the trading boost to heavy sales out of its platinum and palladium products amid price declines.
The group said the platinum fund saw outflows of $25m and palladium saw outflows of $20m last week "as investors pared positions".
"The outflows, however, have been quite small compared with inflows so far this year of $730m," ETFS added.
