Gold ETF holdings up five tonnes in 2nd qtr: WGC

NEW YORK, July 22 (Reuters) - Bullion holdings in gold-backed, exchange-traded funds (ETFs) reported a net inflow of five tonnes in the second quarter, bringing the total to 948 tonnes, industry-sponsored World Gold Council (WGC) said on Tuesday.

The price of gold averaged $896.29 an ounce in the second quarter, nearly $30 below the previous quarter level, hurt by a stronger dollar and less buying of bullion as a safe-haven investment, WGC said in its quarterly investment digest.

WGC said that inflow into all gold ETFs totaled 22 tonnes in May, and the pace picked up in June to 45 tonnes, offseting an significant outflow of 61 tonnes in April as investors took profits heavily after bullion hit an all-time high.

"There was a downward correction in the gold price in April but this proved short-lived," said Natalie Dempster, investment research manager, World Gold Council.

"The combination of rising inflation and price expectations, a weakened dollar and increased concerns about systemic risk in the financial sector have all pushed gold higher again," Dempster said.

Spot gold hit a record high of $1,030.80 an ounce on March 17.

Spot gold XAU= traded at $963 an ounce on Monday, while U.S. gold futures for August delivery GCQ8 on the COMEX division of the New York Mercantile Exchange ended at $963.70 an ounce.

Bullion held by SPDR Gold Trust (GLD.P)GLD.A, the world's largest gold ETF, was at 644 tonnes at the end of June, XAUEXT-NYS-TT and bullion holdings held by gold ETFs continued to grow early in the third quarter, WGC said.

Price volatility, measured on a 22-day rolling basis, jumped to a peak of 33 percent on April 18, but volatility declined steadily thereafter, ending the quarter at 23 percent, WGC said. (Reporting by Frank Tang; Editing by Christian Wiessner)