Gold ETFs Attract Inflows for Sixth Consecutive Month

(Reuters) – Global physically-backed gold exchange-traded funds (ETFs) experienced inflows for the sixth consecutive month in October. The World Gold Council (WGC) reported that year-to-date flows turned positive for the first time this year.

Demand Drivers

The demand was primarily supported by inflows from North America and Asia. Amid rising geopolitical tensions and ongoing market uncertainties, investors have increasingly turned to gold ETFs, which serve as wealth storage by holding gold on behalf of investors.

In October alone, gold-backed ETFs attracted $4.3 billion in inflows, increasing total collective holdings to 3,244 tons. This marks a significant turnaround after three years of outflows, largely driven by high interest rates.

Market Impact

The positive inflows, alongside record gold prices, pushed global assets under management to a record $286 billion by the end of October. According to the WGC, North American demand was particularly influenced by uncertainties surrounding the U.S. presidential election.

In addition to political factors, military escalations in the Middle East and reports of North Korean soldiers joining Russia in the Ukraine conflict may have further spurred the demand for gold ETFs.

The WGC also noted a slight increase in worldwide gold trading volumes, fueled by over-the-counter (OTC) and ETF activities.

Outlook

With prices having risen 33% this year, bullion is expected to be one of the top-performing assets in 2024. The metal reached a record high of $2,790.15 per ounce on October 31, driven by the onset of U.S. interest rate cuts and escalating geopolitical tensions.

[GOL/]