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Global gold-backed exchange-traded funds (ETFs) enjoyed another month of net inflows during August, as recovering investor demand in North America and Europe continued.
According to the World Gold Council (WGC), funds added another 29 tonnes of the precious commodity last month to take total holdings to 3,182 tonnes. This was the fourth successive month of inflows.
Total inflows were valued at $2.1 billion, which — combined with the soaring gold price — took assets under management (AUMs) across all funds to $257 billion.
Gold ETF inflows and outflows since autumn 2022.
Gold prices rose almost 4% over the course of the month. It struck fresh record peaks above $2,530 per ounce towards the end of August as worries over the global economy and the geopolitical landscape intensified.
Second Straight Increase
ETFs in North America recorded their second consecutive month of inflows, the WGC said.
Funds accumulated 17 tonnes of extra material (worth $1.4 billion) to take total holdings to 1,608 tonnes. Meanwhile, AUMs increased to $130 billion.
The WGC said that “easing inflation readings, a cooling labour market, and dovish messages in both the Fed’s meeting minutes and Powell’s speech at the Jackson Hole symposium” boosted demand for gold, by raising the prospect of a September rate cut which drove US Treasury yields and the US dollar lower.
Escalating conflict in the Middle East and Eastern Europe also boosted demand for safe-haven gold, the organisation said.
It added that “the strong gold price performance led to exercises of in-the-money call options of major gold ETFs, creating sizable inflows at the expiry date.”
Rises Elsewhere, Too
In Europe, ETFs added eight tonnes of material to take total holdings to 1,327 tonnes. Inflows had a value of $362 million, which in turn pushed AUMs to $107 billion.
According to the WGC, demand for gold picked up as “fear stemming from headlines around the unwind of the popular ‘yen carry trade’ resulted in a spike of volatility in global equity markets.”
It added that “prospects of further interest rate cuts from local central banks may have provided support.”
Total holdings in Asian funds rose to 184 tonnes thanks to a modest month-on-month uptick. Inflows had a total value of $32 million to help take AUMs to $15 billion.
The WGC said that “India once again led inflows in the region, marking the strongest month since April 2019, mainly driven by continued positive momentum from the budget announcement in July and the local gold price strength.”
The organisation added that “Japan also saw notable inflows – for the sixth consecutive month – which might be related to amplified equity market volatility and lower Japanese government bond yields in August.”