30 April, 2024

Q1 gold investment (excluding OTC) was notably lower at 199t as ETF outflows eclipsed modest growth in bar and coin demand

  • Holdings of global gold ETFs declined by 114t in the first quarter (-US$6bn)
  • Q1 bar and coin investment generated a 3% y/y increase to 312t
  • OTC investment of 136t was a key contributor to total demand and to the gold price reaching record highs in March.
Tonnes Q1'23 Q1'24   Year-
% change
Investment 275.3 198.6 -28
Bar & Coin 303.9 312.3 3
India 34.4 41.1 19
China, P.R.: Mainland 65.9 110.5 68
Gold-backed ETFs -28.6 -113.7 - -

Source: Bloomberg, Company filings, Metals Focus, World Gold Council

Q1 gold investment (excluding OTC) was down by 28% y/y. Strength in total bar and coin investment was purely due to buoyant demand for small gold bars, which was offset by a slump in demand for gold coins. This partly reflects a divergence in West/East investment behaviour that was evident across all areas of gold investment during the quarter: profit-taking by Western investors contrasted with largely one-way investment demand in Asia.


Chart 5: European and North American gold ETFs saw outflows while Asian funds continued to gain assets

Quarterly change in gold-backed ETFs, tonnes*

European gold ETFs were laggards in Q1

European gold ETFs were laggards in Q1
Quarterly change in gold-backed ETFs, tonnes*
*Data as of 31 March 2024. Source: Bloomberg, Company filings, ICE Benchmark Administration, World Gold Council

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

*Data as of 31 March 2024.

Global gold ETFs saw an eighth consecutive quarter of outflows. Despite a 114t drop in ETF holdings, assets under management (in US dollar terms) rose to their highest for almost two years at US$222bn, thanks to gold’s strong price performance.

A consideration of the ‘OTC investment and Other’ category completes the picture for global investment. This captures investment buying in the over-the-counter market (over and above central bank activity, which also typically takes place through OTC transactions). It remains a sizable element of global demand, measuring 136t in Q1 and averaging 120t per quarter since the beginning of 2023. Estimating and attributing this investment buying is difficult due to its opaque nature.

While OTC demand is not directly observable, the positioning of speculative investors in the US futures market can be indicative of it: net long positions held by money managers saw a sharp increase throughout March and reached their highest level for two years, at around 540t. Comparable moves were seen in Chinese futures markets towards the end of the quarter and more significantly in April. Similar to shifts we reported last year, the OTC volume also incorporated buying by high net worth individuals in several markets, as well as healthy stock build-up in markets across Asia.


Global gold ETFs lost 114t in Q1 –total holdings declined 4% to 3,113t. Outflows measured US$6bn during the quarter, but accounting for the 8% Q1 price gain, total AUM rose 4% to US$222bn. A monthly breakdown shows that outflows slowed markedly, with March seeing a far smaller decline than January or February.

At a regional level, US- and European-listed ETFs both saw a 4% fall in holdings.

In volume terms, North America saw the largest tonnage decline – a function of this being the region with the largest and most liquid funds. The 68t decline in holdings was concentrated in January and February, whereas March witnessed a slight reversal, with modest monthly inflows of US$360mn (+5t).

For much of the quarter investors seemed to focus on the resilience of the US labour market and hotter-than-expected inflation prints, which pushed rate cut expectations further out. Equity market strength further diverted investor attention away from gold. The mid-March turnaround was a reaction to the gold price rally, which triggered activity in the options market and sparked sizable inflows in the closing weeks of the quarter. A fall in both the dollar and Treasury yields early in the month helped spur the inflows, as did comments by the Federal Reserve that a strong labour market, by itself, ”would not be a reason to hold off on rate cuts”.1


Chart 6: Eastern bar and coin investment takes market share from the West

Quarterly net gold bar and coin investment, tonnes, and the average quarterly gold price, US$/oz*

Eastern bar and coin investment takes market share from the West

Eastern bar and coin investment takes market share from the West
Quarterly net gold bar and coin investment, tonnes, and the average quarterly gold price, US$/oz*
*Data as of 31 March 2024. Source: Metals Focus, ICE Benchmark Administration, World Gold Council

Sources: ICE Benchmark Administration, Metals Focus, World Gold Council; Disclaimer

*Data as of 31 March 2024.

US funds have seen only tentative inflows early in Q2, suggesting that the gold price rally has discouraged further significant outflows for now. 

European-listed funds were not far behind their North American counterparts; holdings fell by 54t during the quarter. January and February outflows were driven by similar reasons to the US: investors adjusting their bets on a monetary policy pivot by the ECB and rallying local stock markets.

In contrast to the US, however, outflows in Europe accelerated during March. This was almost entirely due to losses from UK-listed funds, where the pattern of outflows appeared to reflect profit-taking at times that coincided with a pause in gold’s price rally. Elsewhere in Europe, funds listed in Germany and France saw small inflows in March.

Asian-listed funds registered non-stop inflows for the fourth consecutive quarter, adding 10t (US$696mn) during the quarter. China generated the bulk of the increase, with investor interest in gold flourishing in an environment of a weakening local currency and poorly performing domestic equity markets. Japan also recorded positive, albeit minor, flows (+2t), amid gold’s staggering yen price performance. Funds listed in other regions were barely changed during the quarter, as a small increase in South Africa was counterbalanced by a small decrease in Turkey.

Bar and coin

Global bar and coin investment in Q1 matched the previous quarter at 312t, translating to a modest 3% y/y increase. Gold price action helped to maintain buoyant demand, which came in 17% above its five-year average of 268t.

As previously noted, Western and Eastern markets tend to see contrasting trends in gold investment. And while this quarter was no exception, there was something of a turnaround in their respective behaviour. Typically, investors in Eastern markets are more responsive to price and will tend to react to a sharp rise by sitting on the sidelines (waiting for a pause or corrective pullback in the price as an opportunity to buy) and/or by taking profit and cashing in on their gold investments. Western investors have historically been attracted to a rising price and tend to buy into the rally.

The most recent quarter has seen these roles reversed: investment demand in Asia and the Middle East has shown considerable growth, unaccompanied by a marked increase in profit-taking/selling back. In contrast, investors in the US and Europe have taken a different approach. While investment demand for gold bars and coins remains healthy, it has been countered by strong profit-taking from investors keen to realise gains on their gold holdings as the price reached successive record highs.


Bar and coin demand in China jumped to 110t in Q1, an increase of 68% y/y and the strongest quarterly total for more than seven years. Value preservation needs, seasonal gifting demand and the outstanding gold price performance attracted investors.

A weaker local currency during the first two months of the year, together with concerns over volatility in the property and stock markets (mainly in January), led Chinese investors to seek value preservation, and spurred demand for gold. Chinese New Year-related purchases added to demand, with investors showing a strong appetite for dragon-themed gold bars and coins.

The staggering gold price rally in March also attracted investors who are faced with a range of poorly-performing alternative investments. And continued announcements of official gold purchases by the People’s Bank of China further underscored the positive view of gold, among both small-scale ‘average’ investors and larger-scale, high-net-worth investors.

In the face of a soaring gold price the local premium eased during March, but the average Q1 premium was the highest ever for a first quarter, at US$40/oz, providing further evidence of the strength of investment buying in China.

China’s bar and coin investment should remain healthy over coming quarters. China is likely to continue its path of easing monetary policy to support the country’s economic recovery. And gold should therefore remain attractive to local investors as yields trend lower. Investor interest will also likely be sustained by continued weakness in the housing market and ongoing global geopolitical tension, as well as continued central bank gold buying. That being said, any sharp increase in gold price volatility may deter investors, while any speed bumps in China’s economic growth could also impact household budgets and the capacity to buy gold.


Q1 saw healthy levels of gold bar and coin investment in India, up 19% y/y at 41t. This was on a par with Q1 2022, which was itself the strongest first quarter since 2014.

In a repeat of the pattern seen in India during Q4’23, demand was sparked by the price correction in February, which investors expected would be temporary and would presage a rebound. The subsequent sharp price rally reaffirmed those positive price expectations. Investors bought into the rally as the price reached successive record highs, anticipating a continued uptrend.

The strength in bar and coin investment echoed sentiment elsewhere in India’s gold market. ETFs saw positive Q1 inflows (+2t), and two new funds were launched during the quarter, indicating continued growth in these products.

While investor sentiment towards gold remains positive, the domestic general election, which runs from April to June, may keep demand subdued. Data shows that gold consumption tends to decline ahead of such elections, particularly as there is greater scrutiny on the movement of gold and cash.

Any further sharp rises in the gold price could present a short-term headwind by sparking profit-taking and may result in a reduction in volumes purchased due to affordability constraints.

Middle East and Turkey

Gold investment demand in Turkey remained greatly elevated at 44t. Bar and coin investment was up 50% on the previous quarter – despite the rocketing domestic price – although the y/y comparison showed a 12% drop from last year’s record quarterly high. To put Q1 demand tonnage into context, it stood at 89% above the 24t five-year quarterly average. And in lira value terms, demand was a record-breaking TR91bn, compared with TR58bn in Q1’23.

The ongoing environment of extreme inflation, domestic political tension, global geopolitical volatility and negative real interest rates continued to fuel investment for gold as a safe haven and inflation hedge.

Demand remains lofty despite continued restrictive quotas, limit the official permissible volume of bullion imports to 12t per month. The result has been to drive up local premiums to more than US$200 in March, having ranged between US$50-100 for the earlier months of the quarter.

Bar and coin investment in the Middle East region of 26t was 15% lower y/y, from the very high base of Q1’23. Demand was little changed from the previous quarter and 35% ahead of its five-year average of 19t.

Iran, the largest bar and coin market in the region, saw continued healthy demand against a backdrop of heightened regional tension. Investment in the quarter reached 12t and premiums roughly doubled, to around 10-15% by the end of March. Nonetheless, the y/y comparison shows an 11% decline, reflecting the strength of demand seen in the first quarter of 2023.

Investment demand in the UAE cooled 10% y/y as investors waited for a pause or correction in the soaring gold price. Nonetheless, safe haven motives provide a solid foundation for demand in this market.

Elsewhere, Egypt’s improved economic circumstances diluted the safe-haven motive of gold investors. Economic sentiment soared on the back of the IMF bailout and currency float, while the latter also led to a fall in local gold prices for much of the quarter. These factors combined to knock back gold demand by 36% y/y to 5t.


Chart 7:  Turkish investment demand reached eye-watering values in Q1

Quarterly Turkish net gold bar and coin investment, tonnes and US$ value*

Turkish investment demand reached eye-watering values in Q1

Turkish investment demand reached eye-watering values in Q1
Quarterly Turkish net gold bar and coin investment, tonnes and US$ value*
*Data as of 31 March 2024. Source: Bloomberg, Metals Focus, ICE Benchmark Administration, World Gold Council

Sources: Bloomberg, ICE Benchmark Administration, Metals Focus, World Gold Council; Disclaimer

*Data as of 31 March 2024.

The West

US and European investment markets witnessed a modest Q1 decline in buying of new gold bars and coins, but saw a concurrent sharp rise in selling back; the net impact of which is a sharp drop in overall (net) quarterly bar and coin figures.

We noted a slowdown in US investment during the closing weeks of 2023 and this continued into 2024 as profit-taking proliferated. However, the 44% y/y decline in bar and coin to 18t partly reflects a high base: at 33t, Q1’23 was the highest first quarter in our data series.

Buying interest remained healthy, as suggested by the usual uplift in January sales of Gold Eagle coins reported by the US Mint. Albeit driven by the issuance of the 2024 series of Gold Eagles, the data can be taken as indicative of healthy demand in a market able that is able to absorb new coins. Continued concern over ongoing conflicts in the Middle East and Ukraine, the need for diversification strategies and a helpful – albeit minor – boost from Costco’s recent entry to the gold bar market kept demand smouldering at healthy levels.2

But this was met with a jump in liquidations as investors saw continued record high gold prices as too good to pass up, particularly in a quarter without the regional bank failures that lit a fire under demand in Q1 of last year.

Falling premiums reflected loosening dynamics in the market, with robust two-way activity emerging in what had been a largely one-way market for much of the previous four years.

European investment trends echoed those of the US: healthy levels of fresh buying were countered by a wave of selling back as the gold price took off, resulting in lower overall quarterly demand. Regional demand of 18t was half that of Q1’23 as the record gold price encouraged profit-taking.

Germany’s investment market reported active two-way trading, resulting in total demand of 7t (-48% y/y). March saw a decline in premiums on German gold investment products, indicative of shifting dynamics.

ASEAN markets

Currency devaluation was a common theme among the ASEAN markets we track in Gold Demand Trends. This fuelled safe-haven/wealth-preservation demand for gold, as well as attracting investors with superlative returns in local prices.

Vietnam registered the strongest Q1 for bar and coin demand since 2015, at just over 14t. Local investors were attracted by gold’s outstanding performance during the quarter, particularly in the face of rising energy prices – which are expected to fuel inflation – and local currency depreciation against the dollar. Premiums on gold bars reportedly reached a record of US$650/oz. In an attempt to address these tight market conditions, the Vietnamese government has loosened restrictions on the supply of gold, and the State Bank of Vietnam (SBV) plans to resume its process of auctioning gold bars to the market in late April.

Thailand saw a 10% y/y increase in gold bar and coin investment, to 6t. The local gold price rise outstripped that of the international price, thanks to continued depreciation in the baht during the quarter. Although this drew investor attention, demand in the country remains well below pre-pandemic levels, not least because the rise in online gold trading platforms has cannibalised demand for gold bars and coins to a certain extent. Demand in Indonesia was similarly robust, rising 15% y/y to 7t. The continued erosion of value in the rupiah encouraged investors to seek protection against currency devaluation.

Rest of Asia

Despite the gold price smashing through a series of all-time highs in Q1, Japan saw only mild net selling of just 1t. This continued the recent trend of growing investment interest among a younger cohort, which almost matches the continued liquidations more commonplace among the older generation who invested in gold at much lower prices.

The record high gold price fuelled investor interest in South Korea: bar and coin demand was 27% higher y/y at 5t. This represented the strongest quarter for South Korean investment for over two years.


Bar and coin demand in Australia halved y/y to 2t in Q1. Australian bar and coin investors reacted to the price rise in a similar way to those in Western markets: continued buying interest was met with a surge in profit-taking.

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