Informist, Friday, Sep 6, 2024

MUMBAI – Global gold exchange-traded funds saw inflows for the fourth straight month in August, with assets rising by 28.5 tn, or $2.08 bln in value, the World Gold Council said in a report on Thursday. All regions saw inflows, with western funds contributing the lion’s share, it said. "The 3.6% rise in gold price, paired with further inflows, lifted global assets under management by 4.5% to another month-end peak of $257 bln," the WGC said.

Global gold exchange-traded fund losses narrowed to $1 bln due to non-stop inflows between May and August, the report said. The total assets under management jumped 20% during the first eight months of 2024. Year-to-date, Asia attracted the largest inflows (+$3.5 bln), while Europe (-$3.4 bln) and North America (-$1.5 bln) led the outflows.

Holdings of global gold exchange-traded funds rose to 3,181.7 tn in August from 3,153.2 tn in July.

In August, European gold exchange-traded funds saw an inflow of $362.4 mln, the fourth successive month of positive inflows, led by the UK, Switzerland, and Germany. The prospect of further interest rate cuts from local central banks may have provided support. However, these central banks are expected to adopt a steadier and slower pace than the US Federal Reserve.

"The fear stemming from headlines around the unwind of the popular 'yen carry trade' resulted in a spike of volatility in global equity markets. This likely boosted safe-haven demand as gold ETFs concurrently saw increased inflows in the region," WGC said.

Asian gold exchange-traded funds saw their 18th straight month of inflows, up by 0.3 tn, or $31.6 mln, in August, led by inflows into India, WGC said. "India once again led inflows in the region, marking the strongest month since April 2019, mainly driven by continued positive momentum from the Budget announcement in July and local gold price strength," the report said.

Indian gold exchange-traded funds witnessed an inflow of 2 tn in August. The total value of assets under management in the country was $4.4 bln in August, up from $4.1 bln in July. The total assets under management holdings in the country rose to 51.8 tn in August from 49.8 tn in July. In India, Nippon India ETF Gold BeES saw an inflow of 1.4 tn, or $114 mln, in August. The fund ranked eighth globally in terms of fund inflows. The top 15 funds in terms of inflows also included Kotak Gold ETF, which was at the 13th position.

Holdings with North American funds saw a second consecutive month of inflows, up by 17.2 tn, or $1.42 bln, in August. Easing inflation readings, a cooling labour market, and dovish messages in both the Fed’s meeting minutes and Fed Chair Jerome Powell’s speech at the Jackson Hole symposium have cemented the deal for a rate cut by the US central bank in September. "Lowering opportunity costs, among other factors, have led gold to another record high and fuelled gold ETF inflows," it said.

Gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 16.7 tn to 862.5 tn in August. iShares Gold Trust, the second-largest gold-backed exchange-traded fund, saw an outflow of 14.9 tn, with holdings at 366.7 tn last month.

The daily average trading volume across all gold markets fell 3.6% on month to $241 bln in August from $250 bln in July. Total net long positioning on the COMEX rose by 134 tn to 917 tn as of August-end, the report showed.

Money manager net long positions rose 25% on month to 737 tn in August, as gold’s eye-catching performance and investors’ rising bets on the Fed’s future rate cuts were the main drivers, WGC said. At 1207 IST, gold price on the COMEX was $2,547.9 per ounce, up 0.2% from Thursday's close. End

US$1 = 83.93 rupees

Reported by Sandeep Sinha

Edited by Namrata Rao

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