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Informist, Tuesday, Oct. 8, 2024

 

MUMBAI – Global gold exchange-traded funds saw inflows for the fifth successive month in September, with assets rising by 18.4 tonne, or $1.41 billion in value, the World Gold Council said in a report on Tuesday. All other regions saw inflows except Europe, with inflows in North American funds leading the charge, it said. "Continued inflows and a record-breaking gold price, global assets under management rose by 5% to $271 billion, another month-end peak," the WGC said.

 

Global gold exchange-traded funds turned positive to $389 million due to continuous inflows in recent months and trimmed year-to-date outflows, the report said. The recent inflows, alongside a soaring gold price, have fuelled the year-to-date surge in the total assets under management by 26% during the first eight months of 2024. Asian funds continued to dominate global year-to-date inflows despite slowdown in demand. Flows into North American funds have flipped to positive, leaving Europe as the only region with outflows so far in 2024.

 

Holdings of global gold exchange-traded funds rose to 3,200.1 tonne in September from 3,181.7 tonne in August.

 

In September, European gold exchange-traded funds saw an outflow of $244.9 million, the first outflow snapping four months of positive inflows, led by the UK. The Bank of England left interest rates unchanged at 5% in September meeting, citing the upside risk of inflation from elevated wage growth. "The BoE’s cautious move cooled investor expectation of future rate cuts, and fuelled a sizable rebound in UK gilt yields which coincided with major local gold ETFs’ outflows," the report said.

 

However, Germany and Switzerland witnessed minor inflows driven by safe-haven demand amid deteriorating economic outlook, especially in Germany. "Intensifying expectations of a further cut from the European Central Bank in October, despite a pause this month (September), led to notable fall in local yields, and likely contributed to increased gold demand," WGC said.

 

Asian gold exchange-traded funds saw their 20th straight month of inflows, up by 2 tonne, or $175.0 million, in September, led by inflows into India, WGC said. "India again saw strong inflows, driven by factors not too dissimilar from previous months," the report said.

 

Indian gold exchange-traded funds witnessed an inflow of 700 kg in September. The total value of assets under management in the country was $4.7 billion in September, up from $4.4 billion in August. The total assets under management holdings in the country rose to 52.6 tonnes in September from 51.9 tonnes in August.

 

Holdings with North American funds saw a third successive month of inflows, up by 16.2 tonnes, or $1.36 billion, in September. The US Fed surprised investors with a cut of 50 basis points at their September gathering, pushing Treasury yields and the dollar down during the month. "Lower opportunity costs, related to interest rates and the dollar, boosted investor interest in gold ETFs," it said.

 

Gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 9.2 tonnes to 871.7 tonnes in September. iShares Gold Trust, the second-largest gold-backed exchange-traded fund, saw an inflow of 14.9 tonnes, with holdings at 370.3 tonnes last month.

 

The daily average trading volume across all gold markets rose 7% on month to $259 billion in September from $241 billion in September. Total net long positioning on the COMEX rose by 59 tonnes to 976 tonnes as of September-end, the report showed.

 

Money manager net long positions rose 8% on month to 793 tonne in September, as gold's eye-catching performance and investors' rising bets on the US Fed's future rate cuts were the main drivers, WGC said. At 2034 IST, gold price on the COMEX was $2,639.2 per ounce, down 1% from Monday's close. End

 

US$1 = INR 83.96

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Sandeep Sinha

Edited by Akul Nishant Akhoury

 

 

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