Global Gold ETFs See Fourth Consecutive Month of Inflows, Driving Prices to Record Highs
As the world's leading investment manager and financial market journalist, I bring you the latest news on the global physically backed exchange-traded funds (ETFs) market. According to the World Gold Council (WGC), gold ETFs experienced their fourth straight month of inflows in August, with a significant increase in holdings in North America and Europe. This positive trend has been fueled by the record high price of gold, which reached $2,531.60 per ounce on August 20, driven by expectations of U.S. interest rate cuts.
Despite this recent surge in inflows, gold ETFs had been experiencing outflows for the past three years due to high global interest rates. The recent four-month streak of inflows has only partially offset the year-to-date losses, resulting in a net outflow of 44 metric tons. In August alone, gold ETFs added 28.5 tons, equivalent to $2.1 billion, bringing their total holdings to 3,182 tons. This increase in holdings has pushed total assets under management to $257.3 billion in August.
Additionally, the global gold trading volumes saw a slight decline in August, with daily trading volumes averaging $241 billion, primarily due to lower exchange-traded activity on COMEX. However, trading activity in the over-the-counter (OTC) market increased by 5.9%, averaging $158 billion.
With gold prices up 21% year-to-date and expectations of U.S. interest rate cuts on the horizon, speculators on COMEX have increased their net long positions by 17% in August, reaching 917 tons—the highest level since February 2020.
In conclusion, the recent inflows in gold ETFs and the surge in gold prices indicate a positive trend for investors looking to capitalize on the precious metal's performance. It is essential for investors to stay informed about market developments and make informed decisions to maximize their investment potential in the ever-changing financial landscape.
