Global Gold ETFs See First Monthly Inflows in a Year, Reports World Gold Council

by

As a seasoned crypto investor with a background in traditional markets and a keen interest in precious metals, I find the recent trends in gold ETFs intriguing. The World Gold Council’s (WGC) May 2024 report highlights an increase in inflows into physically backed gold ETFs, with total assets under management reaching their highest level since April 2022. European and Asian funds were the primary drivers of these inflows, while North American funds saw outflows due to hawkish Federal Reserve minutes.

In May 2024, there was a net purchase of gold in physically-backed exchange-traded funds (ETFs) for the first time since the same month in the previous year, as reported by the World Gold Council (WGC).

As an industry analyst, I’d describe the World Gold Council (WGC) as a powerful international organization specializing in the gold sector. Established in 1987 and headquartered in London, it maintains a significant global presence through offices in India, China, Singapore, the UAE, and the United States. My role as an analyst would involve me explaining that the WGC’s primary objective is to bolster and maintain gold demand across multiple industries. This goal is accomplished through intensive market development efforts, which encompass extensive research and sharing of valuable insights into gold’s economic significance and performance. By supplying accurate and insightful data, the WGC positions gold as a dependable investment and wealth preservation option.

The WGC enhances gold investment opportunities by introducing creative products, including the SPDR Gold Shares ETF and gold savings plans in India and China. Furthermore, the Council upholds industry excellence by advocating for transparency and ethical conduct via programs such as the Conflict-Free Gold Standard and the Responsible Gold Mining Principles. Through collaborations with governments, regulatory bodies, and market participants, the WGC strives to create a reliable and functional gold marketplace.

According to the latest “Gold ETF Flows: May 2024” report from the World Gold Council, published on June 6, gold ETF inflows totaled $529 million in May, primarily due to a 2% surge in gold prices. The aggregate assets under management (AUM) for gold ETFs rose by 2%, reaching a record high of $234 billion. The WGC noted that the enhanced demand for gold ETFs during May resulted in collective holdings recovering to 3,088 tonnes, even though they remain 8.2% below the average for 2023.

Global investment flows were predominantly fueled by European and Asian funds in the WGC‘s report. Asia saw inflows for the 15th consecutive month, while Europe experienced a positive flow for the first time since last May. Conversely, North American fund flows exhibited a slight outflow.

The WGC reported that North American gold ETFs experienced a net withdrawal of $139 million in May. This came after two consecutive months of positive inflows, with the most recent outflow being the smallest since the end of 2019. According to the WGC, this shift was due to a robust gold price increase triggering the redemption of profitable call options, causing new shares to be issued and funds to flow in. However, the WGC noted that hawkish tone in the Federal Reserve’s meeting minutes towards the end of the month dampened the gold price, resulting in outflows.

The World Gold Council (WGC) revealed that European gold Exchange-Traded Funds (ETFs) attracted approximately $287 million in investments during May, marking an end to a continuous twelve-month trend of withdrawals. This surge in demand was primarily fueled by investors’ anticipation of interest rate reductions by the European Central Bank, with funds based in Switzerland and Germany witnessing significant inflows as a result. In contrast, UK-listed ETFs recorded outflows due to heightened political uncertainties and inflation worries.

In Asia, there was a continuous inflow of funds for the 15th straight month, amounting to $398 million in May. China led this trend with an influx of $253 million, fueled by a peak local gold price and a depreciating currency. Japan also played a significant role, contributing substantial funds due to attractive local gold prices.

As a crypto investor following the gold market, I’ve noticed that according to the latest World Gold Council (WGC) report, investors from certain regions, including Turkey, have been pulling out their funds from gold exchange-traded funds (ETFs). This slight decrease in investments was counterbalanced by gains in South Africa. Overall, this data highlights the evolving trends in global gold ETF investments.

Read More

2024-06-10 19:21