Global Gold ETFs Experience Continued Inflows

LONDON (Reuters) – Global physically backed gold exchange traded funds (ETFs) recorded their fourth consecutive month of inflows in August, driven by increased holdings from funds listed in North America and Europe, according to the World Gold Council (WGC) on Thursday.

Gold ETFs, which store bullion for investors, are a significant segment of investment demand for the precious metal, with prices hitting a record high of $2,531.60 per ounce on August 20 amid expectations of forthcoming U.S. interest rate cuts.

Despite this upward trend, gold ETFs experienced outflows for three consecutive years due to high global interest rates. The recent inflows over the last four months have only reduced the year-to-date net outflow to 44 metric tons.

In August alone, gold ETFs saw an inflow of 28.5 tons, equivalent to $2.1 billion, culminating in total holdings of 3,182 tons, as reported by the WGC, which represents global gold miners.

This strengthened gold price and the recent inflows elevated total assets under management to a month-end record of $257.3 billion in August.

The WGC also noted a 3.2% month-on-month decrease in global gold trading volumes in August, down to $241 billion per day, largely due to reduced activity on COMEX. Conversely, average trading volumes in the less transparent over-the-counter (OTC) market increased by 5.9% to $158 billion.

With the gold price up 21% this year and growing anticipation of U.S. rate cuts, speculators raised their net long positions on COMEX by 17% from July to reach 917 tons by the end of August, the highest since February 2020.