The World Gold Council has released its report on Global Gold ETFs for August 2024, highlighting strong performance and consistent inflows across all regions. Global gold ETFs posted their fourth consecutive month of inflows, with Western funds leading the charge. The combined strength of gold prices and recent inflows has boosted global assets under management (AUM) by 20% year-to-date (y-t-d), reaching a record US$257 billion by the end of August. Global gold trading remained active: over-the-counter (OTC) and gold ETF volumes rose while exchange-traded activities cooled.
“Global physically-backed gold ETFs1 added US$2.1bn in August, extending their inflow streak to four months (Table 1, p2).2 All regions reported positive flows: Western funds once again contributed the lion’s share. The 3.6% rise in the gold price, paired with further inflows, lifted global assets under management (AUM) by 4.5% to another month-end peak of US$257bn.3 Collective holdings continued to rebound, increasing by 29t to reach 3,182t by the end of the month.Thanks to non-stop inflows between May and August, global gold ETFs’ y-t-d losses further narrowed to US$1bn. The decline in holdings so far in 2024 has also been trimmed down to 44t. Meanwhile, the total AUM jumped by 20% during the first eight months of 2024. Y-t-d, Asia has attracted the largest inflows (+US$3.5bn) while Europe (-US$3.4bn) and North America (-US$1.5bn) lead outflows.”
Regional trends show North America maintaining its momentum with inflows for the second consecutive month, adding US$1.4 billion in August, driven by lower US Treasury yields, a softening dollar, and expectations of Federal Reserve rate cuts. Europe recorded inflows of US$362 million, led by funds in Switzerland and the UK. Meanwhile, Asia extended its inflow streak to 18 months, though China’s outflows ended its eight-month streak.
Regional Overview:
North America saw its second consecutive month of inflows, adding US$1.4bn in August. This was driven by easing inflation, a cooling labor market, and dovish signals from the Federal Reserve, highlighted by both Powell’s speech at the Jackson Hole symposium and the Fed’s meeting minutes. These factors increased expectations of a rate cut in September. As a result, the US 10-year Treasury yield and the dollar experienced sharp declines, lowering opportunity costs for gold, which reached a record high. The strong gold price also triggered significant inflows from exercised in-the-money call options of major gold ETFs. Additionally, geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict further contributed to the region’s inflows.
Europe saw inflows of US$362mn in August, marking the fourth consecutive month of gains, although at a slower pace than previous months. Switzerland and the UK led the region’s inflows. Earlier in the month, concerns over the unwinding of the popular “yen carry trade” caused a spike in volatility across global equity markets, boosting demand for safe-haven assets like gold. The prospect of further interest rate cuts from local central banks, although more gradual compared to the US Fed, also supported inflows. Notably, Switzerland benefited from FX hedging product inflows as local currencies strengthened against the dollar. Heightened geopolitical risks also played a role in the region’s positive performance.
Asia continued its 18-month streak of inflows, although the US$32mn addition was the smallest since May 2023. India led the region with its strongest inflow since April 2019, fueled by positive momentum from the budget announcement in July and robust local gold prices. Japan also saw continued inflows for the sixth consecutive month, likely due to heightened equity market volatility and lower yields on Japanese government bonds. In contrast, China experienced outflows, ending an eight-month inflow streak.
Other regions recorded their largest inflows ever, totaling US$264mn in August. South Africa saw its strongest monthly inflow on record, likely driven by falling yields amid cooler-than-expected inflation, which raised expectations for a domestic rate cut. Australia, meanwhile, marked its third consecutive month of inflow
According to report ”Global gold trading volumes slightly fell, reaching US$241bn/day in August, 3.2% lower m/m. Average trading volumes over-the-counter (OTC) rose further by 5.9% m/m to US$158bn/day. In tonnage terms, OTC volumes saw a 2% m/m increase. Exchange-traded activities cooled to US$80bn (-18% m/m), mainly due to a 28% m/m decline in COMEX volumes. In contrast, gold trading at the Shanghai Futures Exchange rose by 11% m/m. Global gold ETF trading volumes increased by 17% m/m – mainly contributed by North American funds (+20% m/m). ”
Report said ”COMEX total net longs continued to rise, arriving at 917t by the end of August, a 17% m/m rise and the highest month-end level since February 2020. Increasing net longs were mainly contributed by money managers – their net positions reached 737t as of August, 25% higher than the end-July level and 71% above the H1 average of 430t. Similar to previous months, gold’s eye-catching performance and investors’ rising bets on the Fed’s future rate cuts were main drivers.”
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