Recently, the World Gold Council (WGC), published their Gold ETF Commentary for the month of March. The Outflows narrowed in March said, the WGC. During the first quarter global gold ETF outflows piled up to US$6.5bn, led by North America and Europe while Asia attracted the largest inflows. Low-cost funds saw outflows of US$893mn in Q1, mainly driven by Europe (-US$728mn).
Asia registered non-stop inflows for the 13th month, attracting US$217mn in March. China once again led inflows as the local gold price rally attracted investors. Japan also recorded positive flows. Asian funds led global inflows in Q1 2024 by adding US$678mn, a 7% rise in holdings and a 14% jump in AUM, again boosted by a higher gold price.
The Other region saw a mild US$23mn gain in March, leading to a US$7mn inflow y-t-d. March marked the tenth consecutive monthly outflow from European funds (-US$1.4bn). The UK accounted for the bulk of the loss despite the Bank of England’s dovish tilt in its March meeting, which led to lower government bond yields and a weaker pound.
Taking a closer look, although scattered inflows were evident when the gold price surged, outflows emerged when gold’s momentum paused – likely due to profit-taking activities. And as major central banks –including the European Central Bank and the Swiss National Bank – edged towards or actually started rate cuts, investor risk appetite improved and interest in gold diminished.
Gold ETF demand in Germany improved further, attracting inflows for the first time in 5 months. As noted previously, the worsening economic conditions may have pushed up local investor safe-haven demand. European funds have seen outflows of US$2.9bn so far in 2024. While collective holdings dropped to the lowest in 51 months, total AUM rose by 6.4% during the quarter in the face of a higher gold price. The UK, Switzerland and Germany lost the most in Q1.
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