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Informist, Thursday, Aug 8, 2024

 

--WGC: Global gold ETFs saw inflow of $3.7 bln in July

--WGC: Global gold ETFs saw inflow of 48.5 tn in July

 

MUMBAI – Global gold exchange-traded funds saw inflows for the third successive month, with assets rising by 48.5 tn, or $3.69 bln in value, in July, the World Gold Council said in a report today. All regions saw inflows, with Western funds leading the way, it said. "A combination of the July inflow and a 4% rise in the gold price pushed total global assets under management 6% higher to $246 bln, a new month-end record," the WGC said.

 

Recent inflows and the rising gold price pushed global gold exchange-traded funds' total AUM to $246 bln, a month-end peak. Collective holdings rebounded to 3,154 tn, the highest since January. "While collective holdings have fallen by 72 tn (minus 2%) so far in 2024, their total AUM rose by 15%, supported by a 17% increase in the gold price," the report said. The holdings of global gold exchange-traded funds rose to 3,154.0 tn in July from 3,105.5 tn in June.

 

In July, European gold exchange-traded funds saw an inflow of $1.16 bln, the third successive month of positive inflows, led by the UK, Switzerland, Germany and France. The opportunity cost of holding gold fell, and investor interest in gold exchange-traded funds' rose in the region--further boosted by a record-setting gold price.

 

"A common backdrop across the region in July has been declining government bond yields. Although the European Central Bank left rates unchanged at their July meeting, Lagarde's comment that the September decision is 'wide open' intensified investor expectation for another cut in the near future," the WGC said.

 

Asian gold exchange-traded funds saw their 17th straight month of inflows, up by 5.3 tn, or $438.1 mln, in July, led by inflows into India, the WGC said. "Strong Indian demand was mainly aided by changes announced in the recent Budget which effectively shortens the long term investment qualifying time period and lowered the associated tax rate which makes the investment landscape for gold ETFs more equitable and attractive," the report said.

 

Indian gold exchange-traded funds witnessed an inflow of 2.8 tn in July. The total value of assets under management in the country was at $4.1 bln in July, up from $4.0 bln in June. The total assets under management holdings in the country rose to 49.8 tn in July from 47.0 tn in June. In India, Nippon India ETF Gold BeES saw an inflow of 1.2 tn, or $100 mln, in July. The fund ranked 11th globally in terms of fund inflows.

 

Holdings with North American funds rose by 25.7 tn, or $2.02 bln, which more than reversed minor outflows from May and June. July was unprecedented on the political front with the assassination attempt on Former US president Donald Trump followed by Joe Biden stepping down from the presidential race. "Gold ETF saw inflows around both dates, pointing to increased safe-haven demand," it said.

 

Gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 17 tn to 845.8 tn in July, and the second-largest gold-backed exchange-traded fund, iShares Gold Trust, saw an inflow of 3.2 tn with holdings at 381.7 tn last month.

 

The daily average trading volume across all gold markets rose 27% on month to $250 bln in July from $195 bln in June. Total net long positioning on the COMEX marginally rose by 16 tn to 783 tn as of July end, the report showed.

 

Money manager net long positions reached the highest in July, since February 2020, at 588 tn, 13 tn higher than June, due to continued strength in gold and falling yields amid intensifying expectations of lower interest rates, the WGC said. At 2020 IST, gold price on the COMEX was $2,434.0 per ounce, up 1% from Wednesday's close.  End

 

US$1 = 83.96 rupees

 

Reported by Sandeep Sinha

Edited by Aditya Sakorkar

 

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