Gold ETFs Record Fifth Successive Monthly Outflow In October

Global gold-backed exchange-traded funds (ETFs) endured further outflows in October, according to latest data from the World Gold Council (WGC).

Net outflows from these physically backed funds amounted to $2 billion (or 37 tonnes) last month, the body noted. This was the fifth decline on the spin, although outflows were lower than the $3.2 billion or 59 tonnes recorded in September.

Collective gold ETF holdings slipped to 3,245 tonnes, but assets under management (AUMs) improved 6% to $209 billion thanks to a 7% improvement in the yellow metal price.

Gold barged through $2,000 per ounce in October as escalating conflict in the Middle East drove fresh safe-haven interest. This was the first time in five months that prices topped this psychologically-important milestone.

The WGC noted that “rising yields drove outflows from Western funds, led by North America, while Asia and other regions experienced a positive month.”

However, it added that “an incipient positive trend… started to form at the end of October.” The body said that this trend was most pronounced in Europe.

For the first 10 months of the year, cumulative gold ETF outflows totalled $13 billion, or 225 tonnes, the WGC said.

Further Outflows in North America, Europe

North America led the way in terms of fund outflows in October, the region recording a $2 billion (or 28 tonne) month-on-month loss.

The WGC said that “surging Treasury yields [in] early October overshadowed safe-haven demand from geopolitical risk and equity volatility later in the month.”

This was the fifth consecutive monthly unwinding, meaning that North American funds lost $6 billion (or 104 tonnes) during the first 10 months 2023. Total holdings stood at 1,621 tonnes at the end of October.

European funds, meanwhile, endured outflows of $622 million (or 11 tonnes) last month. However, this was down from the 28-tonne decline that was reported in September.

The council said that “we believe stabilising yields, as the European Central Bank (ECB) paused its ten-month rate hiking spree and the region’s inflationary pressure continued to slide, geopolitical risks and the rising gold price helped limit losses.”

Between January and October, ETFs in Europe endured losses of $8bn (or 135 tonnes). Last month’s reversal was also the fifth successive drop and chiefly reflected losses in the UK and Germany.

Total holdings at the end of October clocked in at 1,432 tonnes.

Asian Funds Increase

However, Asian funds continued to grow in October and net inflows of $81 million (or 1 tonne) were punched. This was the eighth monthly rise in a row as investors in both Japan and China contributed.

During the first 10 months of 2023 Asian ETFs attracted inflows of $1 billion (or 15 tonnes). Aggregated holdings stood at 134 tonnes as of the end of October.