Gold-backed ETF holdings grow at fastest pace in seven years

Jackson Chen | July 9, 2019 | 4:28 pm Markets China Europe USA Gold 
$2 billion pulled from top gold ETF since election
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Global holdings in gold-backed ETFs and similar products grew by 127 tonnes (equivalent to $5.5 billion in inflows) in June, up to 2,548 tonnes –- the largest monthly increase in seven years –- according to data compiled by the World Gold Council, on the back of heightened geopolitical uncertainty causing central banks around the world to go on a gold hunt.

The result was that gold price moved to a six-year high, breaking over the $1,400/oz threshold last month.

The following trends were observed in the gold ETF market for the month of June, based on WGC data.

Regional fund flows

  • North American funds had inflows of 65 tonnes ($2.9 billion, 5.0% of AUM).
  • Holdings in European funds rose by 59 tonnes ($2.5 billion, 4.7%).
  • Funds listed in Asia increased by 2.4 tonnes ($107 million, 3.3%).
  • Other regions had inflows of 0.4 tonne ($16 million, 1.2%).

Individual fund flows

  • In North America, SPDR Gold Shares added 51 tonnes ($2.2 billion, 7.2%), and experienced its largest, one-day inflows of all time on June 21, while iShares Gold Trust added 12 tonnes ($537 million, 4.6%) and low-cost gold-backed ETFs added $72 million or 3% of assets.
  • In the UK, ETFS Physical Swiss Gold added 23 tonnes or nearly $1 billion and grew by 115% during the month. iShares Physical Gold ETC added 20 tonnes ($900 million, 21%) and Invesco Physical Gold added 5.7 tonnes ($240 million, 4.2%).
  • In China, Bosera’s listed fund added $45 million or 13% of its assets last month, and Huaan Yifu added $43 million, but leads global outflows on the year losing $348 million or 32% of its assets.

Long term trends

  • European gold-backed ETF holdings represent its largest percentage of total global assets in history at 47% of total assets, trailing North America by $3.6 billion.
  • Flows in the larger North American funds have been momentum driven with the recent price increase pushing year-to-date flows into positive territory (2.7% of AUM).
  • Long-term strategic holders continue to add to low-cost gold-backed ETFs on a consistent basis, with inflows during 12 of the past 13 months, growing 84% over that period.
  • Outflows of more than 11% in Chinese funds have been a function of profit taking and a shift to riskier assets in the region.
  • Political uncertainty and a weaker pound sterling have supported inflows to UK-based gold-backed ETFs, which remain at all-time highs. UK-based holdings have grown to 554 tonnes or 22% of global gold-backed ETF assets.

With files from the World Gold Council

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