In March, gold-backed exchange-traded funds (ETFs) saw a decrease in holdings, but the outflows were less severe than in previous months. According to the World Gold Council (WGC), global ETFs fell by 14 tonnes, bringing total holdings to 3,112 tonnes, the lowest in more than four years. However, compared to the 49-tonne liquidation in February, March’s outflow was significantly lower, at $823 million.
Despite the decrease in holdings, total assets under management (AUM) surged to 21-month highs of $222 billion, thanks to an 8% rise in gold prices to record levels. Gold prices have continued to climb, reaching $2,363.50 per ounce. In North America, investor interest in gold increased, leading to inflows of $360 million in ETFs and driving AUM to $112 billion. Total physical inflows in the region reached around 5 tonnes, pushing total holdings to 1,574 tonnes.
In Asia, ETFs recorded their 11th consecutive month of inflows, with three tonnes added, valued at $217 million. Total holdings and AUMs in the region increased to 148 tonnes and $11 billion, respectively. The WGC attributed the inflows to a local gold price rally that attracted investors in China, as well as positive flows in Japan. However, funds based in Europe continued to experience outflows, with negative flows of 22 tonnes leading to total holdings falling to a 51-month low of 1,331 tonnes.
European ETFs saw outflows of $1.4 billion in March, despite rising metal prices that boosted AUMs to $95 billion. The UK accounted for most of the outflows, despite the Bank of England’s dovish tone in its March meeting, which led to lower government bond yields and a weaker pound. The WGC noted that while scattered inflows were observed during gold price surges, outflows occurred when gold’s momentum paused, likely due to profit-taking activities.
The WGC highlighted that central banks cutting interest rates had boosted interest in riskier assets, leading to reduced demand for safe-haven assets like gold. In March, global ETFs in gold saw decreased holdings, but the outflows were mitigated by strength in North America and Asia. Despite the lower total holdings, AUMs reached 21-month highs of $222 billion due to rising gold prices. In North America, investor interest in gold increased, leading to inflows and higher AUMs, while Asia continued to see positive flows driven by a local gold price rally. However, European funds experienced continual outflows, despite rising metal prices and a weaker pound following the Bank of England’s dovish stance.
