ETF Holdings Increase for Sixth Consecutive Month – Gold Demand Surges in North America and Asia
As the world’s leading investment manager, I bring you the latest insights into the global ETF market. In October, ETF holdings saw a significant increase for the sixth straight month. The influx of gold into North American and Asian ETFs offset outflows from European-based funds.
Collective ETF gold holdings rose by 43 tons, bringing the total to 3,244 tons of metal. Global assets under management (AUM) by gold-backed ETFs rose by 5 percent to a record $286 billion at the end of the month, fueled by the addition of metal and the soaring gold price.
Year-to-date, global ETF gold holdings have increased by 18 tons, marking the first positive reading in 2024. Gold-backed ETF AUM surged by 33 percent this year, showcasing the growing demand for gold investments.
Despite rising Treasury yields, North American funds reported a 30.5-ton increase in gold holdings, with dollar terms seeing a $2.7 billion increase. Safe-haven demand was boosted by election uncertainty and ongoing conflicts in Ukraine and the Middle East, driving the surge in ETF gold demand.
Asian funds added 23.4 tons of gold in October, with China leading the inflows due to record local gold prices and increased equity volatility. Indian ETFs also saw an increase in gold holdings.
On the other hand, European funds reported gold outflows of 11.1 tons, with the decline in holdings spread across the region. Other regions, including Africa and Australia, reported a 0.6-ton increase in gold holdings, driven by Asian and South African funds.
Global gold trading volumes averaged $268 billion in October, a 4 percent increase from the previous month. ETF gold inflows play a significant role in boosting overall demand in the global gold market.
ETFs provide investors with a convenient way to participate in the gold market, but it’s important to note that owning ETF shares is not the same as holding physical gold. While ETFs offer liquidity and ease of trading, investors should be aware that they are investing in paper gold backed by a trust, not physical metal.
In conclusion, the surge in ETF gold holdings reflects the growing investor interest in gold as a safe-haven asset amidst geopolitical uncertainties. Understanding the dynamics of the ETF market can help investors make informed decisions about their portfolios and financial futures.