Bringing you live news and features since 2006 

Gold-backed ETFs saw net outflows in May

RELATED TOPICS​

 

Global gold-backed ETFs recorded net outflows of USD3.1 billion in May, reversing course after a four-month run that saw inflows push total global gold holdings just 1 per cent shy of the all-time high seen in November 2020, according to new data released today by the World Gold Council.

 

While this was the largest monthly outflow since March 2021, total holdings remain 8 per cent higher year-to-date at 3,823t (USD226 billion), the World Gold Council says.

 

ETF flows closely mirrored the movement in the gold price. While the rising US dollar and higher interest rates weighed on gold in early May, the price rebounded amid a dollar pullback and lower US 10-year real yield lending support, but ultimately settled at USD1,850/oz.

 

 

North American funds: decreased by USD2 billion (1.7 per cent AUM), accounting for almost two thirds of total outflows, while European funds were down USD1 billion (1 per cent AUM), driven by a fourth consecutive Bank of England rate hike.

 

In Asia, funds recorded USD77 million (1 per cent AUM) in outflows, again driven by Chinese market conditions, the World Gold Council says.

 

Low-cost ETFs saw minor outflows of USD86 million (2.5 per cent) in May and gold daily trading averages recovered from an April decline to USD137 billion per day.

 

Gold fell 3.8 per cent in May, finishing the month at USD1,839/oz.

 

Adam Perlaky, senior analyst at the World Gold Council says: “Gold ETFs finally saw their momentum halted in May, after registering four consecutive months of inflows. Higher interest rates and a stronger US dollar weighed on gold to start the month and never fully recovered, and ETF investment activity followed suit.

 

“While North American-listed funds accounted for nearly two thirds of total outflows, central bank behaviour will ultimately be a significant determinant of investment activity looking forward.

 

“While investors have recently expressed the sentiment that central bank actions are too little too late, they are hopeful that the Fed may not raise interest rates as much as previously expected, given recent weak economic data. There are two factors they should consider looking forward. First, while gold is a long-term strategic asset, its seasonality has shifted in recent years. Since 2000, August has replaced September as the second-strongest performing month for gold. Additionally, gold has historically performed well during sustained stock market pullbacks, such as the one we are experiencing now. It’s worth noting that gold has registered positive returns during nine out of the 10 worst quarterly returns by the S&P 500 since 1971.”

 

 

 

Latest News

News came last night from the US that the SEC has approved CBOE’s proposal to list and trade VanEck’s spot..
Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15 per cent increase in net..
European white label ETF platform, HANetf, has announced its total assets under management (AUM) has now exceeded USD4.31 billion...
New research from European ETF provider Tabula Investment Management shows investors are expecting improvements in ESG from the gold mining..

Related Articles

Timothy Rotolo, Range Funds
In 2023, Timothy Rotolo launched his business, Range Fund Holdings, the parent company for Range Indices and Range ETFs, followed...
Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by