Global physically-backed gold ETFs experienced inflows for the third consecutive month, adding $3.7 billion in July, according to the World Gold Council. All regions reported positive flows, with Western gold ETFs contributing the most. The combination of these inflows and a 4% rise in the gold price pushed total global assets under management (AUM) up by 6%, reaching a new month-end record of $246 billion. Collective holdings increased by 48 tons, totaling 3,154 tons by the end of July.
Despite earlier losses, recent inflows have reduced the year-to-date (YTD) loss in global gold ETFs to $3 billion. While collective holdings have dropped by 72 tons (-2%) in 2024, the total AUM rose by 15%, bolstered by a 17% increase in the gold price. Notably, European and North American funds remain in the red for the year, while Asia has recorded significant inflows.
North American funds saw inflows of $2 billion in July, reversing minor outflows from May and June. This influx was driven by heightened safe-haven demand amid political uncertainties, such as the assassination attempt on Trump and Biden’s withdrawal from the presidential race. The falling inflation, cooling labor market, and U.S. Federal Reserve Chair Powell’s indication of a potential rate cut in September further fueled investor interest in gold ETFs. Consequently, U.S. Treasury yields fell, and the dollar weakened, pushing the gold price to a record high during the month.
European gold ETFs also recorded their third consecutive month of inflows, attracting $1.2 billion in July, the strongest since March 2022. The UK and Switzerland led these inflows, supported by declining government bond yields and expectations of further interest rate cuts by the European Central Bank. The Bank of England’s decision to cut rates by 25 basis points on August 1 also bolstered investor interest in gold ETFs. As a result, the total AUM of European funds rose by 12% year-to-date, reaching $103 billion.
In Asia, inflows extended their streak to 17 months, with $438 million added in July. India led the inflows, driven by favorable changes in the investment landscape and a strong local gold price. China and Japan also saw net inflows due to similar factors. Asia’s YTD inflows now stand at $3.6 billion, significantly outpacing other regions. The total AUM of Asian funds reached a record $15 billion, with collective holdings increasing by 47 tons.
Other regions, including South Africa and Australia, also saw mild inflows in July, contributing to a total of $40 million in YTD inflows. Gold trading volumes rebounded across all markets, averaging $250 billion per day in July, a 27% month-over-month increase. The rise was driven by stronger LBMA volumes and increased activity on major exchanges, particularly COMEX. The continued strength in gold and falling yields pushed COMEX total net longs up by 2%, ending July at 783 tons, the highest month-end level since February 2020.
