Original title: world Gold Council: global gold ETF positions continued to decline in September, leading to a net outflow in the third quarter
In September, there was a net outflow of 15.2 tonnes of gold ETF from the world. The inflow of Asian markets failed to exceed the outflow of European and North American markets. Global gold ETF holdings fell to 3592 tons ($201 billion) in January, the lowest since April. Gold prices fell as a result of higher US bond yields, a stronger dollar and a decline in net long positions in funds managed by the New York Mercantile Exchange.
Review of sub-regional markets
European funds were the main driver of global gold ETF outflows in September, followed by North American funds. Larger funds in the UK and Germany led European outflows, with overall outflows of 11.5tonnes ($640 million). Outflows from North America totaled 6.6t ($349 million), mainly due to outflows from large US funds. The outflow from both regions stems from an announcement by the central bank that policy will be tightened in the future-the ECB cancelled its massive emergency purchase programme, while the Fed said it would scale back its asset purchases in the fourth quarter and raised expectations of an interest rate hike next year. By contrast, Asian-listed funds had a net inflow of 2.4mt ($135 million) in the third quarter, with increased stock market volatility and a correction in domestic gold prices pushing Indian gold ETF positions to their highest level since September 2013. Other regions have also contributed to global gold ETF, with inflows of 0.4 tons (US $25 million).
Gold price performance and trading volume
Gold fell about 4 per cent to $1743 an ounce in September. The short-term price performance model of the World Gold Council shows that the gold sell-off in September was driven by changes in interest rates, a stronger dollar and a correction in futures positions. Us bond yields rose to quarterly highs on expectations that loose monetary policy by central banks could tighten. This, in turn, supports the strength of the dollar, as real yields rise roughly in line with nominal yields, taking into account inflation expectations in the US. After the weakest month since June, gold prices fell in the third quarter, down more than 8 per cent from a year earlier. Average daily gold trading volume rose to $146 billion in September from a low of $141 billion in August, but it is still below the year-to-date average of $160 billion. Trading volume on the New York Mercantile Exchange (COMEX) has risen only slightly from its low since the start of August, while net long futures positions reflect a general lack of interest in gold until recently, falling to 537 tonnes ($30 billion) in the second half of the month. However, this is still slightly above the historical weekly average of about 500tonnes ($28 billion).
Highlights of the third quarter of 2021
Gold ETF positions basically followed the volatility of gold prices in the third quarter, with North American funds having the highest outflow rate, with an overall outflow of 46.3t (about $2.6 billion, a 2.4 per cent decline in assets under management). Outflows from the North American market were mainly from larger US funds, mostly in August. During this period, European funds were more resilient to falling prices as inflation expectations continued to rise, resulting in a net inflow of 15.2tonnes ($909 million, up 1.0 per cent on assets under management). This is mainly driven by German funds, which, similar to the second quarter, accounted for more than half (8.9 tons, $516 million) of total inflows into the European market. Low-cost ETF in the region continued to show strong growth, helping to ease capital outflows by a total of $920 million (15.9t).
Asian funds had inflows of $228 million in the third quarter (up 3.0 per cent on asset management) as investment demand remained strong at a time of turmoil in Asian stock markets. In addition, the falling price of gold has prompted some investors to strategically take positions in gold when the price of gold falls. Supported by weak emerging market equities, inflows from other regions were $13 million in the third quarter (asset management rose 0.4 per cent).
Review of Subregional Markets in the third quarter of 2021
Outflows from European and North American funds exceeded inflows to Asian funds in September
(2) outflow from European funds was 11.5t (about US $640 million, a decrease of 0.7 per cent in the size of assets under management).
(3) the outflow of funds held by North American funds was 6.6t (about US $349 million, a decrease of 0.3 per cent in the size of assets under management).
(4) the net inflow of Asian listed funds was 2.4t (about US $135 million, with an increase of 1.7 per cent in assets under management).
5 other regions had inflows of 0.4 tons (about US $25 million, an increase of 0.7 per cent in the size of assets under management).
Changes in individual investors' positions
In September, SPDR? The Gold Shares and the UK's iShares Physical Gold have driven global outflows, partly offset by inflows into Asian funds and iShares Gold Trust in the US.
2 in North America, SPDR? Gold Shares had outflows of 10.2t ($561 million, a 1.0 per cent decline in assets under management), while iShares Gold Trust had inflows of 2.5tonnes ($145 million, up 0.5 per cent on assets under management). Low-cost ETF iShares Gold Trust Micro rose 0.6 tons ($37 million, or 6.2% of assets under management), and Goldman Sachs Physical Gold rose 0.5 tons ($29 million, or 7.6% of assets under management).
3 in Europe, iShares Physical Gold outflows were 6.2t (US $351 million, a decline of 2.7 per cent in asset management) and Invesco Physical Gold outflow was 1.5t (US $81 million, a decline of 0.6 per cent in asset management). On the other hand, Xtrackers IE Physical Gold had inflows of 1.7t ($93 million, a 4.7 per cent increase in assets under management), while Xetra Gold increased by 0.8t ($48 million, or 0.3 per cent of assets under management).
4 in Asia, China's Hua an Yifu gold ETF (Huaan Yifu Gold ETF) inflows were 1.1t (about US $58 million, an increase of 3.4 per cent in assets under management), while India's Nippon India Gold inflows were 0.5tonnes (US $31 million, an increase of 3.9 per cent in assets under management).
Long-term trend
After a partial recovery in the second quarter, gold ETF in developed markets was flat again to negative in the third quarter as gold prices continued to weaken.
So far this year, global gold ETF has seen an outflow of $8.3 billion, while assets of large funds in North America and Europe have flowed out with fluctuations in gold prices, while low-cost ETF and Asian funds have remained active.
Asian gold ETF rebounded from the decline in capital inflows in the second quarter and has once again become the main growth driver of global gold ETF. With the intensification of regional economic uncertainty, Asian gold ETF has grown by nearly $1.2 billion a year (up 17% under management).
Despite different price conditions, low-cost ETF continues to generate capital inflows, growing at an annual rate of nearly 43 per cent, accounting for about 6 per cent of the global gold ETF market.