Global Gold ETFs recorded inflows for the sixth consecutive month in October 2024, adding $4.3 billion and lifting total assets under management (AUM) to a new record high of $286 billion. Year-to-date (YTD), global gold ETF holdings increased by 18 tonnes, marking the first positive reading in 2024 and representing a 33% surge in AUM. The growth was driven by rising gold prices and increased demand across most regions as investors sought safety amid heightened economic uncertainties, geopolitical tensions, and market volatility, according to the latest report from the World Gold Council.
Regional Performance Breakdown
North America: The region led global inflows with $2.7 billion in October, marking the fourth consecutive month of positive net flows. Despite higher yields and a stronger dollar, investor demand remained robust. The World Gold Council noted, "Continued gold ETF buying may have come as a surprise to many as yields rose and the dollar strengthened, leaving investors re-thinking the future interest rate path amid robust US economic performance." Uncertainty surrounding the upcoming US Presidential election and escalating geopolitical tensions, including the ongoing Middle East conflict and rumors of North Korea's potential involvement in the Russia-Ukraine war, contributed to the sustained interest in gold. The surge in the gold price also played a role, creating a "fear of missing out" (FOMO) effect among investors.
Europe: In contrast to other regions, European gold ETFs experienced outflows, shedding $563 million in October. Rising local bond yields, despite the European Central Bank’s (ECB) 25 basis point rate cut, increased the opportunity cost of holding gold. The stronger US dollar and weakening European currencies exacerbated the decline, particularly impacting FX-hedged products. The report highlighted, "Rebounding yields in the region pushed up the opportunity cost of holding gold and are likely a major driver."
Asia: Asian gold ETFs attracted significant inflows of $2.1 billion in October, extending the region's inflow streak to 20 months. China led with record-breaking inflows, driven by a soaring local gold price and increased equity market volatility following aggressive stimulus measures in September. Indian gold ETFs also saw continued inflows, spurred by strong gold price momentum, stock market volatility, and favorable adjustments to the long-term capital gains tax treatment for gold.
Australia and South Africa: Funds in other regions recorded inflows for the fifth consecutive month, adding $68 million in October. In Australia, a weakening Aussie dollar boosted gold's local returns, increasing investor demand for currency hedging. South Africa benefited from cooling inflation, raising expectations for potential rate cuts, which contributed to a six-month streak of positive inflows.
The World Gold Council's report underscores sustained demand for gold ETFs across most regions, highlighting investors' flight to safety amid ongoing market volatility, geopolitical uncertainties, and shifts in central bank policies.
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