Despite gold being under pressure, flows into gold ETFs were undeterred, with almost all regions seeing gains in AUM. European-listed funds led the way, racking up inflows of 26t (US$2bn) in April, lifting regional AUM to a new record high of 1,692t (US$104bn). Regional inflows were again concentrated in the UK, Germany and France, all of which hit a record level of holdings during the month. Funds listed in Switzerland bucked the trend with minor net outflows. European investors continue to seek exposure to gold amid the backdrop of record high inflation exacerbated by concerns over energy supplies, slower economic growth and geopolitical unrest.
North American funds saw inflows of 18t (US$1bn) in April, the vast majority of which were in the larger and more liquid US products. While interest rate expectations rose during the month, investor concerns about slower economic growth and high inflation were unabated, driving demand for hedges such as gold and commodities. Gold ETFs in the ‘Other’ region were also up fractionally (0.5t, US$30mn), due to inflows into Australian funds.2
Asia was the only region to see outflows in the month, with tonnage holdings down fractionally at 1t (US$46mn), almost reversing March inflows. The decline was driven by Chinese gold ETFs, which shed further holdings (-3t, -US$199mn) in line with the broad trend of outflows we have seen to date this year. Chinese investors continued to behave tactically in April: booking profits amid higher local gold prices and unwinding positions ahead of the five-day Labour Day Holiday.3 One new Chinese gold ETF was also listed during the month, taking the total number of funds on offer to 16.
Gold trading volumes and futures demand fall
Gold trading volumes saw a sizeable drop in April, with daily trading averaging US$120bn a day compared to US$167bn a day in March. Declines in trading volumes in exchange-traded products – futures and ETFs – were the biggest contributors, with OTC volumes seeing a relatively smaller m-o-m decline. Net long positioning, via the recent Commitment of Traders (COT) report for COMEX gold futures, fell towards the end of the month, to 735t (US$45bn) after having maintained a tight 820-890t range throughout most of April.4
Inflows occurred in most regions during the month – led by Europe and North America – with only Asia seeing outflows
- North American funds had inflows of 18t (US$1bn, 1%)
- European funds had inflows of 26t (US$2bn, 2%)
- Funds listed in Asia had outflows of 1t (US$46mn, -1%)
- Funds in other regions added 0.5t (US$30mn, 1%).
iShares Physical Gold (UK) and Amundi Physical Gold (France) led European flows, while SPDR® Gold Shares, SPDR® Gold MiniShares and iShares Gold Trust drove US flows
- In North America, SPDR® Gold Shares had inflows of 3t (US$248mn, 0.4%), while iShares Gold Trust gained 4t (US$239, 0.7%). In the low-cost space, SPDR® Gold MiniShares Trust added a further 4t (US$255mn, 5%), while Aberdeen Gold Trust added 1t (US$65mn, 2%)
- In Europe, iShares Physical Gold had inflows of 12t (US$724mn, 4%), Amundi Physical Gold added 5t (US$344mn, 7%) while UBS ETF Gold lost 2t (-US$94mn, -5%)
- In Asia, Chinese ETF Huaan Yifu Gold lost 2t (-US$127mn, -7%), while Bosera Gold Open-ended fund lost -0.5t (-US$33mn, -3%).
Gold ETFs have roared back in 2022 with assets near all-time highs
- 2022 inflows of US$19bn have far surpassed the 2021 outflows of US$9bn; current holdings of 3,869t leave total gold ETF holdings 1% away (or 54t) from the all-time high of 3,922t in November 2020
- AUM of US$238bn is just shy of the August 2020 AUM high of US$254bn
- To date ,2022 has been marked by strong inflows into US and European funds. Despite double-digit growth in 2021, Asian gold ETFs have experienced outflows of over US$930mn (-11%), compared to inflows of close to US$1bn (20%) last year.