According to the latest report from the World Gold Council, global gold-backed exchange-traded funds (ETFs) experienced a significant surge in inflows in July, marking their strongest month since April 2022. Analysts at the World Gold Council highlighted that these ETFs saw their third consecutive month of inflows, with a total of $3.7 billion in bullion investments during the period.
One of the most notable aspects of this uptick was the increased participation from North American funds, a region that had previously shown negative trends in 2024. The report emphasized that all regions reported positive flows in July, with Western gold ETFs making the most substantial contributions to the overall increase.
The surge in inflows, coupled with a 4% rise in the price of gold, propelled total global assets under management (AUM) to a new month-end record of US$246 billion, reflecting a 6% increase. The collective holdings of gold ETFs concluded July with a 48-ton increase, reaching a total of 3,154 tons.
While North American funds had previously recorded outflows totaling $2.9 billion year-to-date, the trend shifted dramatically in July with $2 billion in inflows, marking a significant turnaround. The report linked this shift to various factors, including geopolitical events such as the assassination attempt on Trump and Biden’s decision to step down from the presidential race, which led to an increased demand for safe-haven assets like gold.
Moreover, the report highlighted that European funds had been experiencing a positive trend for several months, with July seeing inflows of $1.2 billion, the strongest since March 2022. Factors such as declining government bond yields and central bank policy decisions contributed to the growing interest in gold ETFs in the region.
In Asia, investors continued to show interest in gold ETFs, with 17 consecutive months of inflows amounting to $438 million in July. Strong demand in countries like India, China, and Japan was attributed to changes in investment regulations and favorable local gold price performances.
Overall, the global gold market witnessed increased trading volumes in July, with average daily volumes reaching $250 billion, a significant rise from previous months. The report also highlighted a 16% increase in over-the-counter trading activities, driven by stronger LBMA volumes and rising trading activities across major exchanges.
In conclusion, the recent strong performance of global gold ETFs, coupled with increased trading volumes and market dynamics, indicate a growing investor interest in gold as a safe-haven asset amidst geopolitical uncertainties and changing economic conditions.
