The World Gold Council writes that amid decades-high inflation and heightened market volatility, gold-backed ETFs registered net inflows of USD838 million in November, marking the first month of positive flows since July.
According to new data released today by World Gold Council, global gold ETF holdings rebounded from year-to-date lows, increasing to USD208 billion, as demand returned amid market volatility including a 30-year inflation high.
Notably, North American and European gold ETFs served as the primary contributors to November’s inflows, the Council writes, a reversal from the headwinds faced by larger funds in these regions most other months this year. Gold daily trading averages also increased for the second consecutive month, rising from USD152 billion to USD182 billion.
The World Gold Council reports that North American funds increased by USD744 million (0.72 per cent AUM), driven by gains from major US funds likely impacted by positioning around options expiration of listed gold ETFs in mid-November.
Meanwhile, European funds were up USD333 million (0.38 per cent AUM), led by inflows in the UK and France.
Asian funds: declined USD297 million (3.65 per cent AUM), primarily driven by tactical selling in China that occurred as the local gold price rose and equity markets stabilised.
Adam Perlaky, Senior Analyst, at World Gold Council says: “Recent central bank activity was less supportive of gold demand at month-end, as the US Federal Reserve announced its plan to taper bond purchases in November and acknowledged that current elevated inflation should no longer be characterised as ‘transitory.’ However, amid this environment ETF flows in North America reversed course, with the US specifically accounting for USD771 million in inflows. Ultimately, the recent activity suggests stronger investor demand amid heightened market volatility.”
“Gold ended the month 2 per cent higher, as inflation expectations rose to their highest level since 2005 in the first half of November. Returns were ultimately offset, as a crash in oil prices and rising concerns around the COVID Omicron variant led to US dollar outperformance.”