Breaking News: Gold ETFs See Fifth Consecutive Month of Inflows, Reaching Record Highs
In a recent report by the World Gold Council (WGC), it was revealed that global physically backed gold exchange-traded funds (ETFs) experienced a fifth straight month of inflows in September. This surge was mainly driven by North America-listed funds increasing their holdings, contributing to the overall positive trend in the market.
Gold ETFs, which store bullion for investors, have become a significant source of investment demand for the precious metal. This demand has been reflected in the record high price of gold, which reached $2,685.42 an ounce on September 26, following the start of U.S. interest rate cuts.
After facing three years of outflows due to high interest rates, the past five months have seen a turnaround in year-to-date net flows, with a positive increase of $389 million in dollar terms.
In September alone, gold ETFs saw inflows of 18.4 metric tons, equivalent to $1.4 billion, raising collective holdings to 3,200 tons. This influx, combined with a stronger gold price, led to total assets under management reaching a peak of $270.9 billion by the end of September.
The WGC also reported that global gold trading volumes experienced a 7% increase month-on-month in September, reaching $259 billion a day. Average trading volumes in the over-the-counter (OTC) market also saw a 10% rise to $176 billion.
With gold prices up by 28% this year and expectations of future U.S. rate cuts, speculators have been increasing their total net long position on COMEX. By the end of September, this position had grown by 6% to 976 tons, marking the highest level since February 2020.
Analysis: The consistent inflows into gold ETFs and the rising gold prices indicate a growing interest in the precious metal as a safe-haven asset. Investors are turning to gold as a hedge against economic uncertainties, such as interest rate cuts and market volatility. This trend could potentially lead to further price increases and investment opportunities for those looking to diversify their portfolios and protect their wealth.