Gold ETF holding lowers in November: WGC

Dec 07, 2023

Recently in a Gold ETF commentary for the November highlights, the World Gold Council witnessed Global physically backed gold ETFs saw a small outflow of US$920mn in the month, significantly narrower than the previous month. Holdings lowered to 3,236t, a 9t decline in November, while total Assets under management (AUM) rose by 2% to US$212bn, supported by a meaningful 2% rise in the gold price.

At the Regional front, North American funds attracted net inflows of US$659mn in November, putting a stop to the region’s five-month losing streak. During the month, the US Fed kept rates unchanged for the second consecutive meeting, bringing forward investors’ expectations for the tightening cycle ending. Such anticipation was intensified by decelerations in inflation and the cooling job market, weighing further on US Treasury yields and the dollar.

However, most of the support for both the price and ETF flows came from heightened geopolitical risk early in the month and investor positioning. The gold price rally ahead of the expiry date of major gold ETF options on 17 November also brought notable inflows. Contrastingly, Europe saw outflows for the sixth consecutive month, shedding nearly US$2bn in November.

With the region’s yields remaining at their decade highs, opportunity costs continued to weigh on European investors’ appetite for gold ETFs.5 Meanwhile, the strengthening local currencies – which translated to weaker local gold price performances relative to their USD peer-also suppressed investors’ interests.

On the bright side, FXhedged products – mainly from Switzerland – brought inflows, partially offsetting November’s losses. Funds listed in Germany saw the region’s largest outflows in the month. Asian funds continued to cap inflows (+US$47mn) in November, albeit only mildly. Indian and Japanese inflows outweighed outflows from China. The Other region saw subtle outflows (-US$21mn), mostly from Australian and South African funds.

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