Market Update June 4th – North American Market Getting Onboard with Gold

The latest figures reported from gold and silver ETFs indicate that the North American market, which has been largely absent from the current metals rally, is finally getting on board.

Assets under management in all precious metal ETFs now total $217 billion, nearing the top end of the historical range. Assets under management in net COT/Futures is $90 billion, also at the top end of its respective historical range. Note: the increased value is driven mostly by price appreciation rather than inflows.

Collectively, Western positioning (net COT + ETF) of over $300 billion accounts for approximately 0.7% of the US equities market value. That allocation has moved up from the historical floor of around 0.5% but remains very underweight compared to the COVID peak (~1%) and the bull market era in 2010-2012 (1.5 – 2%).

Costco continues to see strong demand for its gold bars and silver coins online. Wells Fargo researchers estimated in early April that the members-only retailer may have been pulling in $100 million to $200 million in monthly revenue from these products after rolling them out late last summer. Costco’s CFO said last week "Total e-commerce sales growth in the quarter was led by gold and silver bullion, gift cards and appliances."

Bitcoin ETFs have remained relatively flat over the past two months, indicating that less investment is moving away from gold and silver ETFs into Bitcoin. This contrasts the notable trend when BTC ETFs first came to market in January 2024.

In conclusion, the resurgence in gold and silver ETFs suggests a renewed interest in precious metals within the North American market. The strong demand for gold and silver products, as evidenced by Costco's success, highlights a shift in investor sentiment towards traditional safe-haven assets.

Sources: MKS PAMP, NBC News

Follow Mark on Twitter @YaxleyYax

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Mark Yaxley, CEO of Strategic Wealth Preservation (SWP), began his journey in precious metals with Kitco Metals in 2006. Co-founding SWP in 2014, he now guides individual and commercial clients towards their investment goals. Renowned for his 'Inside the Vault' YouTube series, Mark has helped millions gain insights into gold and silver bullion ownership.