Gold ETF Flows: April, 2022

Gold ETF inflows slowed but remained healthy in April

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April highlights

Global gold ETFs registered healthy net inflows of 43t (US$3bn) in April. While this is 77% lower than the previous month, which was the strongest since February 2016, it is the fourth consecutive month of inflows, maintaining the momentum of flight-to-quality flows we have witnessed this year. This lifts global holdings to 3,869t (US$238bn), 1% below the all-time high of 3,922t in November 2020. 

Gold faced pressure during the month as yields rose sharply – US 10-year real yields briefly turned positive for the first time since 2020 – in response to progressively more hawkish central bank rhetoric, while the US dollar strengthening significantly (DXY +5%). As a result, gold was unable to maintain the gains it made in the first half of the month, ending April 2% lower at US$1,911/oz.1  But it retained some support in April in the form of further equity weakness, high inflation and the ongoing war in Ukraine. For more on this, please see our Gold Market Commentary.

 

ETF flows chart

Data as of

Sources: Bloomberg, Company Filings, ICE Benchmark Administration, World Gold Council; Disclaimer

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

Regional flows5

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%).

Individual flows

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%).

Long-term trends

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.

Footnotes

  1. Based on the LBMA Gold Price PM as at 29 April 2022.

  2. ‘Other’ regions include Australia, South Africa, Turkey, Saudi Arabia, and the United Arab Emirates.

  3. The 2022 Chinese Labour Day Holiday ran from 30 April to 4 May. All financial markets were closed during this period.

  4. Data to 26 April 2022.

  5. We calculate gold-backed ETF flows both in ounces/tonnes of gold and in US dollars because these two metrics are relevant in understanding funds’ performance. The change in tonnes gives a direct measure of how holdings evolve, while the dollar value of flows is a finance-industry standard that gives a perspective on how much investment reaches the funds. We have made a few adjustments and improvements to our calculation methodology as of 1 July 2021 that will impact historical and future data. Specifically, we revised the methodology used to estimate changes in gold holdings as described below:

    • Previously, changes in tonnes were calculated by converting a fund’s AUM (in USD) into gold holdings (in tonnes) and computing the difference over periods. However, currency movements and large daily and weekly gold price movements could distort the difference between tonnage change and US-dollar fund flows during short time horizons. We therefore adjusted tonnage change as a function of fund flows versus AUM and replaced the tonnage change field with fund flows (tonnes).
    • Now, for most funds, we estimate US-dollar fund flows, as described in section 2.3.2 below, and then convert those flows to fund flows (tonnes).
    • Fund flows (tonnes) and US-dollar fund flows will now represent a more aligned explanation of investment demand for gold ETFs, while the true holdings of a fund, in US dollars and tonnage, will remain a close estimate, impacted by the currency and price volatility described above.
    • Based on our initial analysis, the changes are not likely to have a material longterm effect on historical information, particularly on a global or regional aggregate basis, but will adjust short-term fluctuations that can sometimes occur due to input data and timing variations.