WGC: Global Gold ETFs See First Inflows in a Year

Published on: Jun 7, 2024
Author: Amy Liu

According to the latest data from the World Gold Council, after a weak March, central bank gold purchases rebounded in April with a global net purchase of 33 tons. The World Gold Council (WGC) stated on Thursday, June 6th (local time), that global physical gold exchange-traded funds (ETFs) attracted inflows for the first time in a year in May, primarily driven by increased holdings in European and Asian listed funds.

Demand for safe-haven assets amid geopolitical and economic uncertainties, as well as sustained buying by central banks, pushed gold prices higher from March to May, reaching a record high of $2449.89 per ounce on May 20th.

The World Gold Council noted in a research report that gold ETFs, a major category of precious metal investment demand, saw inflows of 8.2 metric tons or $529 million in May. The rise in gold prices and inflows pushed total assets under management up by 2% to $234 billion, the highest level since April 2022.

Gold ETF total holdings rebounded to 3088 tons in May, but remained 8.2% below the average level of 2023. With global interest rates high, gold ETFs posted outflows for three consecutive years, reducing by 244.4 tons in 2023.

Steven Hochberg, Market Analyst Director at Elliot Wave International, highlighted that safe-haven assets are in a bull market. While gold trading above $2300, ETFs are just starting to accumulate gold bars. The current volatility in gold prices is merely part of a larger upward trend. In other words, gold prices are breaking out. However, the lack of increase in gold holdings in ETFs signals that there is further room for a rebound. These ETFs will suddenly join in, aligning with the trend in gold, which is their historical norm.

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