Gold ETF inflows return in January

Feb 4th, 2021 | By | Category: Commodities

Gold ETFs recorded global net inflows of 13.8 tonnes ($1 billion, 0.4% AUM) in January following two consecutive months of outflows in November and December, according to data from the World Gold Council.

Gold ETF inflows return in January

Gold ETFs recorded net inflows in January for the first time in three months.

At the end of the month, assets under management across gold ETFs globally stood at 3,765t ($226bn), just 4% shy of the intra-month record of 3,915.8t ($244bn) set in early November.

European gold ETFs accounted for the bulk of inflows in January with net new assets of 17.5t ($1.1bn, 1.2% AUM).

The Invesco Physical Gold (SGLD LN) led the way, gaining 6.9t ($421.1 million, 3% AUM), followed by the Amundi Physical Gold (GLDA LN) which gathered 4.6t ($278.1m, 8.5% AUM), and the iShares Physical Gold (SGLN LN) which attracted 3.4t ($217.1m, 1.5% AUM).

Bucking the trend in Europe were the Gold Bullion Securities (GBS LN) and the WisdomTree Physical Gold (PHAU LN), which registered declines of around (-1t, -$60m).

Holdings in North American gold ETFs, which account for 53% of global AUM, fell fractionally by 6.3t (-$303m, -0.3% AUM).

The SPDR Gold Shares (GLD US), the world’s largest gold ETF, shed 10.6t (-$575.9m, -0.8% AUM) while its cheaper counterpart, the SPDR Gold MiniShares (GLDM US), saw inflows of 3.1t ($186.4m, 4.6% AUM).

Flows into Asian gold ETFs were effectively flat during the month with AUM up by just $19.2m, due primarily to rising real yields, a strong equity market, and a strengthening RMB in China.

Gold in US dollar terms fell fractionally (-1.3%) in January to finish at $1,863.8/oz. This left gold as one of the weakest performing assets during the month, particularly when compared to the broader commodities complex.

According to the World Gold Council, bullion’s weak performance during January reflected renewed hope for further fiscal stimulus in the US under the Biden Administration and was further supported by the Federal Reserve maintaining a dovish stance.

Looking forward, however, the World Gold Council believes investment demand for gold should remain supported this year. The organization notes that low interest rates will keep the opportunity cost of holding gold depressed, while investors will continue to seek gold’s safe-haven quality to navigate several portfolio risks including ballooning budget deficits, inflationary concerns, and the potential for equity market corrections as valuations remain high.

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