Gold ETFs slips in May!

Gold-backed ETFs experienced

small outflows in May

Holdings in global gold-backed ETFs and similar products fell marginally in May by 2.2 tonnes (t) to 2,421t, equivalent to US$141mn in outflows as consistent European fund growth was offset by outflows in North America, early in the month, and in Asia.

Global assets under management (AUM) in US dollars rose 1% to US$101bn as the price of gold rallied 1.7% during May. Year to date, global gold-backed ETFs have lost 0.5% in assets (19t, US$535mn), mostly due to heavy outflows in February, April and early May. However, higher uncertainty and market volatility have supported flight-to-quality flows into gold-backed ETFs in recent weeks.

Regional fund flows:

Holdings in European funds rose by 15.9t (US$627mn, 1.3%), North American funds had outflows of 13.7t (US$580mn, 1.2% AUM). Funds listed in Asia decreased by 4.1t (US$171mn, 6%) & other regions had outflows of 0.5t (US$17mn, 1.3%).

Individual fund flows:

In North America, iShares Gold Trust lost 12.7t (US$523mn, 4%) and SPDR® Gold Shares 3.5t (US$134, 0.4%), which represented the majority of the regions’ outflows; but low-cost gold-backed ETFs added $90mn or 4% of assets.

UK-based Invesco Physical Gold continued to add funds of 4.6t (US$192mn, 3.5%) over the month. This fund has the largest growth globally this year, adding 16.9t (US$712mn, 14.4%). In China, Bosera’s listed fund lost US$131mn or 28% of its assets last month, and Huaan Yifu lost $41mn having lost US$391mn or 36% of its assets this year.

Long term trends:

European gold-backed ETF holdings represent its largest percentage of total global assets in history at 47% of total assets, trailing North America by 3%. Long-term strategic holders continue to add to low-cost gold-backed ETFs, despite bearish positioning in the larger, momentum-driven funds and futures markets.

Holdings in Chinese funds have put a damper on total Asian holdings with investors moving into risky assets.

Political uncertainty and a weaker pound sterling have supported inflows in UK-based gold-backed ETFs that remain near all-time highs.