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The biggest banking crisis since the Great Financial Crisis of 2008 prompted investors to flee into gold last month, ending ten consecutive months of outflows, according to the latest report from the World Gold Council.
In its monthly ETF report, the WGC said 32 tonnes of precious metal, worth $1.9 billion, flowed in global gold-backed exchange-traded products in March.
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Looking at regional data, the report said that North American-based funds saw inflows of 12 tonnes last month, worth $806 million. At the same time, European funds saw inflows of 18 tonnes, valued at $927 million. Finally, the Asian ETF market saw inflows of 3 tonnes, worth $203 million.
Although March saw the gold ETF market sharply turn, demand last month wasn't enough to undo a relatively disappointing start to the year. The WGC said that gold-backed ETFs saw net outflows of 28.7 tonnes worth $1.5 billion in the first quarter of 2023.
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Global physically backed gold ETFs1 saw a small outflow of US$920mn in the month, significantly narrower than the previous month.2 Holdings lowered to 3,236t, a 9t decline in November, while total AUM rose by 2% to US$212bn, supported by a meaningful 2% rise in the gold price.3
Regional highlights
North American funds attracted net inflows of US$659mn in November, putting a stop to the region’s five-month losing streak. ...
The first month of 2024 saw a continuation of 2023’s outflows from gold ETFs led by North America, with European funds continuing to see heavy losses while Asia saw another monthly inflow, according to the latest data from analysts at the World Gold Council (WGC) published Wednesday.
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So Western ETFs outflows ---> Asian ETFs inflows
Gold-backed exchange-traded products are showing signs of life as they attracted some attention from North American investors last month, even as European markets continued to see significant outflows, according to the latest data from the World Gold Council (WGC).
The WGC released its latest report on monthly ETF flows on Tuesday, which showed that global outflows dropped to their slowest rate since February 2020 and are 21% lower than the month-end record of 3,915t in October.
The analysts noted that North American-listed funds saw holdings actually increase by 4.8 tonnes, valued at $360 million.
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More:
The gold market is well supported as ETF selling slows to a two-year low - WGC
The Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.www.kitco.com
Wall Street is waking up on gold...
Highlights
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- Global gold ETFs saw a continuation of monthly outflows, despite early-April inflows spurred by the gold price strength.
- Asia led global inflows and North American funds registered positive demand; but these were dwarfed by European outflows.
- End April saw global gold ETF holdings fall to 3,079t, the lowest since February 2020. But the higher gold price in the month extended total AUM by 3% to US$229bn.
- Gold ETF trading volumes increased across all regions, with a surge in North America, indicating continued investor interest despite outflows.
North American funds saw their second consecutive monthly inflow, albeit small, attracting US$124mn in April. As in March, the strong gold price performance triggered in-the-money (ITM) call options of major gold ETFs, creating sizable inflows. ...
Even after accounting for these inflows, North America heads the regional outflows, losing US$4bn y-t-d, mainly due to notable outflows during January and February. But while the region’s collective holdings fell further, their AUM rose to US$117bn – the highest since April 2022, 10% below the month-end peak of US$129bn recorded in August 2020.
Europe once again led global outflows, losing US$4bn in April and representing the eleventh consecutive month of losses. Funds listed in the UK, France and Germany led outflows. ...
April compounded Europe’s y-t-d losses to nearly US$7bn, with the UK, Switzerland and Germany accounting for most of the region’s outflows. But accounting for higher prices, AUM in European funds have increased by 3% since the beginning of 2024.
April (+US$1bn) extended Asian funds’ inflow streak to 14 months. China was the main engine in the month, where gold ETFs witnessed not only record monthly inflows (+US$1bn) but also reached their highest AUM ever. And the growth in assets amounts to a stunning 36% so far in 2024. In general, a sluggish equity market, expectations of a weaker local currency, increasing promotional efforts from ETF providers’ and strong price performance were the main drivers. Pushed by China’s sizable inflows, Asian funds have, collectively, added US$2bn during the first four months of 2024; their total AUM has jumped 35% y-t-d, rising to the highest on record.
Funds in the other region saw mild outflows during the month, losing US$65mn, driven mainly by Australia and South Africa. At the end of April, the region’s y-t-d outflows amount to US$58mn, with Australia accounting for the bulk.
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Despite the generally negative attitude toward gold you hear in the mainstream financial media, the vast majority of professional investors in North America own at least some gold and the number has been growing in recent years.
A World Gold Council survey of 525 North American investors found a steadily growing trend of gold ownership. The survey included large institutions, consultants, and financial advisors.
In 2018, 69 percent of the survey respondents said they had some allocation to gold. In the most recent survey, 85 percent reported owning some gold.
Given all of the negative talk we hear about gold in the financial media, this seems like an exceptionally high number. But digging in deeper, we find that just over a quarter of the investors who reported owning gold hold less than 1 percent of assets under management in the yellow metal.
About half of the respondents said they held at least 1 percent of their portfolio in gold. About 24 percent have an allocation of 3 percent or more.
Over one-quarter of respondents said they plan to increase gold allocations in the next 12 to 18 months. That was more than double the number who said they plan to reduce their exposure to gold.
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While gold prices enjoyed a strong and steady climb in 2024, physical gold demand, as reflected in ETF flows, was much more uneven, as investors sought to get ahead of big price moves during some periods, and took advantage of record-high prices to liquidate holdings at other times.
Among the major regions, data from the World Gold Council (WGC) showed ETF demand from Asian investors was the most steady, with the overwhelming majority of weekly flows reports showing net gains in the region as China's faltering currency and collapsing property market combined to drive strong safe-haven appeal for the yellow metal. By contrast, European and North American ETF demand reflected a more arbitrary and opportunistic attitude as OECD investors were happy to jump on and off the gold price roller coaster depending on how interest rates, equities, and precious metals prices were performing on a week-to-week basis.
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