Market trading volumes slid in June

Jul 08, 2023

The World Gold Council released the report of Gold ETF commentary-June outflows result in H1 disinvestment. According to the June and H1 highlights, global physically-backed gold ETFs experienced net outflows in June, calling a halt to their three-month inflow streak.

Collective holdings of global gold ETFs fell by 56t to 3,422t while total assets under management (AUM) reached US$211bn (-4% m/m).The early June strong equity market performance in key markets likely shifted focus away from risk-off assets such as gold. And the majority of outflows occurred when the gold price dropped during the second half of the month amid hawkishness from major central banks in the face of obstinate inflationary pressure.

June’s outflow caused global gold ETF demand during H1 2023 to turn negative at 50t, equivalent to fund outflows of US$2.7bn. Global gold market trading volumes slid in June, said the report.

Global gold market trading activities cooled in June, averaging US$152bn per day, a 13% decline from May. The gold price weakness during the month may have impacted investor enthusiasm for gold trading. While the OTC market remained relatively stable with a mild 1% m/m decrease, gold trading volumes at exchanges fell by 29%, chiefly due to cooling activities on COMEX. Average daily volumes of global gold ETFs also fell 21% m/m.

Total net longs of COMEX gold futures were 478t on 27 June, 11% lower than end-May. This matched the global trend in ETF demand: the gold price pullback and the equity market rally of early June in key regions may have led many to adjust their gold futures positions. Following the third consecutive monthly fall, total net longs fell below their 2022 average of 527t.

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