According to the Gold ETF commentary- WGC for October 2023, Key Takeaways are,
1: global gold ETF outflows continued in October but at a slower pace than September.
2: Rising yields drove outflows from Western funds, led by North America, while Asia and other regions experienced a positive month!
3: An incipient positive trend, however, started to form at the end of October most visibly in Europe. 4: Y-t-d, global gold ETF holdings have dropped by 6%, but total assets under management (AUM) have risen 3% thanks to the strong gold price performance.
The Gold ETF October outflows from physically-backed gold ETFs totalled US$2bn in October, the fifth consecutive monthly loss. Collective holdings reduced by 37t to 3,245t. But total AUM increased by 6% to US$209bn thanks to a 7% rise in the gold price during the month. And October’s gold price surge, mainly driven by geopolitical uncertainties, was the strongest since last November.
Y-t-d, global outflows summed to US$13bn, equivalent to a 225t fall in holdings. The majority of this loss comes from European funds, with North America the other major contributor.
The average daily trading volume across global gold markets rose to US$169bn/day in October, a 13% increase month over month (m/m). All market segments saw improved activity in the month amid rising safe-haven demand and the strong gold price performance. OTC trading activities saw an 11% m/m rebound and volumes of gold ETFs increased by 51%. Trading volumes of exchange-traded contracts were also 16% higher.
By the end of October gold futures net longs at the COMEX totalled 533t, 52% higher than September. And money manager net longs rose by 220t to 331t, a notable improvement compared to early October when they fell below zero.
Looking at the long term trends & following another reduction in October, losses in global gold ETF holdings amounted to 225t during the first ten months of the year, the second largest in history-2013’s 791t accumulative decline was the worst. By the end of the month, collective holdings of global gold ETFs stood at their lowest since March 2020 and 17% away from the historical high of 3,916t recorded in October 2020.
In October, weakness in low-cost gold ETFs extended for the fifth consecutive month, collectively shedding US$1bn (17t), led by European funds (-US$818mn, -14t). Y-t-d outflows across global low-cost funds piled to US$5bn (80t). During the period, low-cost funds in North America saw inflows of US$114mn (1t), while Europe accumulated net outflows of US$5bn (81t).