Gold ETFs Heating Up

Recently, I’ve highlighted the significant and consistent buying of gold by central banks, driven largely by macroeconomic and geopolitical risks. Today, we turn our attention to the recent performance of gold ETFs, which has also been noteworthy and supportive of gold prices.

Gold ETFs play a crucial role in the overall gold market. They are second only to central bank purchases in terms of significance, and their performance heavily influences gold prices. Currently, all three segments of the investment gold market; central banks, ETFs, and the retail physical market are active buyers. As a result, analysts expect gold prices to continue appreciating in the foreseeable future.

In September, global physically backed gold ETFs recorded their fifth consecutive month of inflows, attracting US $1.4 billion. Most of these inflows were concentrated in North America, while Europe experienced mild outflows. As a result of continued inflows and a record-breaking gold price, global assets under management (AUM) increased by 5% to reach $271 billion, marking another peak. Additionally, total holdings rose by 18 tons to 3,200 tons total by the end of September.

Thanks to these ongoing inflows, year-to-date totals from global gold ETFs have turned net positive, totaling US $389 million. The recent influx of capital, coupled with rising gold prices, has contributed to a 26% surge in total AUM this year. Notably, North American funds have also flipped to positive flows, leaving Europe as the only region with outflows in 2024. 

Meanwhile, Asian funds have continued to lead in global year-to-date inflows, despite a recent slowdown in demand.

Source: World Gold Council

Follow Mark on Twitter @YaxleyYax