Gold ETFs enjoy strongest inflows for over a year

May 9th, 2018 | By | Category: Commodities

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Global gold-backed ETFs/ETPs (hereafter ETFs) enjoyed their strongest month of net inflows during April since early 2017, according to data from the World Gold Council.

Gold ETFs increased AUM 3% ($3.1bn) in April.

Flows were strong for both US- and European-listed gold ETFs which raked in 43.7t ($1.9 billion, 3.4% AUM) and 27.1t ($1.2bn, 2.8% AUM) respectively. Asia-listed ETFs saw net inflows of 2.4t ($100 million, 2.9% AUM), with the rest of the globe showing marginal outflows of 1t ($49m, -3% AUM).

The SDPR Gold Shares (GLD US) took the lion’s share of US inflows, increasing by 25.1t ($1.1bn, 3% AUM). The iShares Gold Trust (IAU US) was more popular relative to its size, gaining 17.1t ($700m, 6.4% AUM) during the month.

The Xtrackers Physical Gold ETC (XGLD LN) led the charge in Europe, collecting 7.9t to increase its AUM by $343m, or 34.5%. The Invesco Physical Gold ETC (SGLD LN) and Xetra-Gold (4GLD GR) also fared well, increasing AUM by 6.5t ($268m, 5.5% AUM) and 6.2t ($229m, 3.1% AUM) respectively. Not far behind, the ETFS EUR Daily Hedged Physical Gold (PPTE LN) more than doubled its total AUM, accumulating 5t ($211.1m, 107.4% AUM).

Inflows were steady throughout the month even though the gold price retraced early gains, finishing April 1% down, after reaching an intra-day high of approximately $1,360/oz mid-month. At the end of April, gold ETFs globally held 2,481t, or $104.8bn of the yellow metal, having increased assets under management by 3% ($3.1bn) during the month.

According to the World Gold Council, market uncertainty stemming from missile strikes in Syria by the US, the UK and France, as well as continued trade war rhetoric cast a cloud over global stock markets and acted to boost the gold price. At the same time, higher inflation expectations and a weaker US dollar through April added further tailwinds. The negative effect of higher interest rates on gold were significant however with the gold price ending the month slightly down.

Year-to-date, US funds continue to account for the overwhelming majority (54%) of gross global inflows, led by IAU (45t, $1.9bn) and GLD (33.7t, $1.5bn). Elsewhere, XGLD  and Bosera Gold (159937 CH) have seen significant net inflows, with 15.6t ($0.7bn) and 11.7t ($0.5bn) respectively.

Despite seeing little movement in assets during the first quarter of 2018 (-1t, $0.2bn), European holdings are now comfortably up since the end of December mostly as a result of April’s robust inflows.

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