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Informist, Friday, Nov. 8, 2024

 

MUMBAI – Global gold exchange-traded funds saw inflows for the sixth consecutive month in October, with assets rising by 43.3 tonnes from a month ago to 3,243.5 tonnes, the World Gold Council said in a report on Thursday. In value terms, the assets under gold exchange-traded funds rose $4.28 billion to $286 billion in October.

 

"Continued inflows and the record-shattering gold price lifted global assets under management a further 5% to another month-end record of $286 billion," the WGC said. North American funds continued to lead inflows while Europe remained the only region with outflows. 

 

Assets under global gold exchange-traded funds were higher than the December level in volume terms for the first time in 2024. The assets under gold exchange-traded funds at the end of October were 18 tonnes higher than the December level, the report said. In 2024, inflows into gold ETFs have reached $4.7 billion, and total AUM surged by 33%, getting an additional boost from the rocketing gold price. 

 

In October, European gold exchange-traded funds saw an outflow of $563.4 million, the second straight month of outflows, led by France, Germany, Switzerland, and the UK. Rebounding yields in the region pushed up the opportunity cost of holding gold, which is likely a major driver. "The weaker local currencies – amid deteriorating economic prospects in Europe and a strengthening dollar – resulted in outflows related to FX-hedging products, adding to the region’s losses during October," the report said.

 

Asian gold exchange-traded funds saw inflows of 23.4 tonnes, or $2.08 billion, in October, led by higher inflows into China, WGC said. "The record-shattering local gold price and amplified equity market volatility, following a sizeable rally in late September fuelled by aggressive stimulus announcements, led to the strongest monthly inflow on record," the report said.

 

Indian gold exchange-traded funds witnessed an inflow of 1.9 tonnes in October. The total value of assets under management in the country was $5.1 billion in October, up from $4.7 billion in September. The total assets under management in the country rose to 54.5 tonnes in October from 52.6 tonnes in September. In India, Nippon India ETF Gold BeES saw an inflow of 700 kg, or $67.7 million, in October. The fund ranked 11th globally in terms of fund inflows.

 

Holdings with North American funds saw a fourth straight month of inflows, up by 30.5 tonnes, or $2.69 billion, in October. WGC said the demand for gold was helped by uncertainty surrounding the US Presidential election. The escalation of tensions in West Asia and Ukraine may have contributed to the rising demand for gold ETFs, it said.

 

WGC said an element of 'FOMO' – fear of missing out – amid the continued surge in the gold price also boosted investor interest in North American funds.

 

Gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 19.8 tonnes to 891.5 tonnes in October. iShares Gold Trust, the second-largest gold-backed exchange-traded fund, saw an inflow of 9.8 tonnes, with holdings at 380.1 tonnes last month.

 

The daily average trading volume across all gold markets rose 3.5% on month to $268 billion in October from $259 billion in September. Total net long positions on the COMEX fell by 71 tonnes to 905 tonnes as of October-end, with net long positions of money managers falling by 7% from a month ago to 737 tonnes. 

 

Daily trading volumes on over-the-counter markets rose 4% on month to $181 billion in October. Gold trading activity in exchanges remained stable last month with the minor 2?ll at the COMEX offset by a 20% rise in the Shanghai Futures Exchange, it said.

 

The liquidity of global gold ETFs improved by 12% to $2.9 billion. At 1348 IST, gold on the COMEX was at $2,694.4 per ounce, down 0.4% from Thursday's close. End

 

US$1 = INR 84.38

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

 

Reported by Sandeep Sinha

Edited by Saji George Titus

 

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