Global Gold ETFs See Fifth Consecutive Month of Inflows, Reaching Record Highs
In September, global physically backed gold exchange-traded funds (ETFs) saw a fifth straight month of inflows, with North America-listed funds leading the way in adding to their holdings, according to the World Gold Council (WGC). The price of gold reached a record high of $2,685.42 an ounce on Sept. 26, driven by the beginning of U.S. interest rate cuts.
After experiencing three years of outflows due to high interest rates, the past five months have turned the tide, with year-to-date net flows in dollar terms now at a positive $389 million. In September alone, gold ETFs saw inflows of 18.4 metric tons, totaling $1.4 billion, raising collective holdings to 3,200 tons.
The stronger gold price and recent inflows also pushed total assets under management to a month-end peak of $270.9 billion in September. The WGC reported that global gold trading volumes increased by 7% month on month to $259 billion a day, with average trading volumes in the over-the-counter (OTC) market rising by 10% to $176 billion.
With the gold price up 28% this year and the expectation of future U.S. rate cuts, speculators increased their total net long position on COMEX by 6% from August to 976 tons by the end of September, marking the highest level since February 2020.
Analysis:
Investors have been flocking to gold ETFs as a safe haven asset, driving up the price of gold to record levels. The recent inflows and increased trading volumes indicate strong investor interest in gold as a hedge against economic uncertainty. With the prospect of further U.S. rate cuts on the horizon, gold prices are expected to remain strong, making it an attractive investment option for those looking to diversify their portfolios and protect against market volatility.