28 October, 2021

Y-o-y decline in ETF holdings exceeded bar and coin investment growth

  • Global gold ETFs lost 27t in Q3, a sharp y-o-y decline compared to the substantial inflows seen in Q3’20; outflows were concentrated in North America, while funds listed in other regions saw growth in holdings 
  • Healthy growth in Q3 bar and coin investment to 262t was supported by a significant y-o-y turnaround in Thailand, and record y-t-d demand in the US and Germany
  • Data supported by anecdotal evidence suggests that over-the-counter (OTC) gold demand was robust during Q3. 
Tonnes Q3'20 Q3'21   YoY
Investment 495.0 235.0 -53%
Bar & coin 221.0 261.7 18%
  India 33.8 42.9 27%
  China, P.R.:Mainland 57.8 64.7 12%
Gold-backed ETFs 273.9 -26.7    -

Source: Metals Focus, World Gold Council

The gold price ended the quarter 1% below where it had begun; a modest rise in July was followed by a sharp price swing in August before slipping back in September. Investment demand was mixed in both its contribution and its response to this price action. ETFs saw modest outflows, while bar and coin investment was boosted in part by investors using price drops as a buying opportunity, in the hope of a rebound.  

Outflows from ETFs were mirrored by general apathy in the futures market. Gold trading volumes were relatively subdued, as were COMEX volumes – money manager net long positioning on COMEX fell 40% throughout the quarter. 

Investment and other demand in the OTC market remains elevated in 2021, as discussed in the Q3 review and outlook.



Gold ETF flows generally moved in step with the gold price during Q3: gains in July were followed by losses in both August and September. The net result for the quarter was a 27t outflow from global gold-backed ETFs. Global holdings at the end of September were just under 3,600t. Year-to-date outflows total 156t – the largest since 2013.

That being said, it is worth considering ETF flows this year in the context of recent history. Global gold ETFs added more than 1,200t to their holdings between 2019 and 2020. Despite fluctuations in the gold price and rising interest rates, global ETF holdings have since then remained relatively steady, declining by only 8% after peaking at just below 4,000t during Q4 2020.1



Global holdings of gold ETFs remain relatively steady, just 8% below the peak

Global holdings of gold ETFs remain relatively steady, just 7% below the peak

Monthly global gold ETF holdings, tonnes, and monthly gold price, US$/oz*

Global holdings of gold ETFs remain relatively steady, just 7% below the peak
Monthly global gold ETF holdings, tonnes, and monthly gold price, US$/oz*
*Data to 30 September 2021. Source: Bloomberg, Company Filings, ICE Benchmark Administration, World Gold Council

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

*Data to 30 September 2021.


North American funds were the only region to experience outflows both during the quarter and so far in 2021, losing 2.4% of their assets or 46.3t in Q3. This was driven by strong outflows in the larger, more liquid ETFs, likely being sourced for their liquidity as the price of gold fell. However, low-cost gold ETFs in the US had net inflows of 14.2t or nearly 10% growth in holdings as the low-cost space expanded its product offerings.

European exchange-traded products (ETPs), as they are commonly known, were resilient by comparison: holdings grew by 15t in Q3 as modest outflows in September did not match the inflows from the previous two months. German funds absorbed more than half of all flows into Europe (9t).  

Asian-listed funds again saw the largest growth in relative – if not absolute – terms. Holdings grew by 4t (3%) as investment demand remained strong amid volatile local equity markets, while gold price dips also provided opportunities for some to build their gold positions. Much of the region’s growth came from China, where 3t of inflows took holdings in Chinese gold ETFs to 72t. Interest in gold ETFs was spurred by turbulence in the local stock market, which culminated in a 7% fall in the CSI300 stock index during the quarter – its largest quarterly loss since Q1’20. The gold price drops in the third quarter were also a likely prompt for investors to increase their allocations.

Funds listed in other regions saw minor inflows of 0.2t during the third quarter, supported by weakness in emerging market equities.

Bar and coin

Global bar and coin demand in Q3 reached 262t, an 18% y-o-y increase. Growth was driven by a 56% increase in global bar investment (to 178t). This was countered by a 29% decline in demand for official coins to 59t, almost entirely due to a sharp reduction in Turkey’s coin purchases from last year’s record high. 

The y-t-d total of 857t is the highest since 2013 – a time when demand rocketed, especially in Asian markets, as investors made the most of a sharp price drop to build holdings. 

Strong Q3 growth was underpinned by a range of factors, including ongoing emergence from COVID restrictions in many countries, continued fears over rising inflation and the price dip in August which encouraged many investors to buy (particularly in Asia). Thailand had an outsized impact on the y-o-y comparison due to the swing in that market from strong net sales in Q3’20 (-45t) to modest net buying (7t) in the recent quarter. 


Y-t-d bar and coin investment almost on par with full year 2019 and 2020

Y-t-d bar and coin investment almost on par with full year 2019 and 2020

Global bar and coin investment, tonnes*

Y-t-d bar and coin investment almost on par with full year 2019 and 2020
Global bar and coin investment, tonnes*
*Data to 30 September 2021. Source: Metals Focus, World Gold Council

Sources: Metals Focus, World Gold Council; Disclaimer

*Data to 30 September 2021.



China’s Q3 bar and coin demand grew 12% y-o-y to 65t. Bar and coin sales were mainly supported by a lower local gold price, gifting demand, healthy household income growth, and local commercial banks shifting their focus to selling physical gold bars and coins. 

The local price of gold was relatively stable in Q3, aside from a couple of sharp dips in August and September, which provided bargain hunters with the opportunity to buy at lower prices. This was well timed, helping to boost gifting around the Mid-Autumn festival. Household incomes steadily increased during the quarter, which helped lift both jewellery and bar and coin sales. Additionally, local commercial banks increased their efforts around gold bar and coin sales as they gradually exit their paper gold trading and Shanghai Gold Exchange gold contract brokerage businesses.  

Looking ahead, investment demand for gold should remain robust in Q4. As a non-renminbi, counter-cyclical asset, we believe gold could increasingly appeal to local investors as pressure on China’s economic growth intensifies. In addition, with other gold trading businesses suspended, we expect Chinese commercial banks to maintain their efforts in selling gold bars and coins.


Indian Q3 bar and coin investment increased 27% y-o-y – to 43t – on pent-up demand and the gold price dip. Aligned with jewellery consumers, bar and coin investors responded to the sharp price dip, and lower average quarterly price, by adding to their holdings. The price effect was heightened by the release of pent-up demand as lockdown restrictions eased. Although investors were tempted by equity market strength (the BSE SENSEX touched an all-time high of 60,000 on 24 September), they remained wary of possible corrections amid such lofty valuations. This encouraged investment in gold for diversification purposes. 

Development of digital platforms opens further channels for gold investors. The launch of digital gold platforms by retailers such as Titan, Kalyan and Senco Gold provides Indian investors with a convenient way to make systematic investments in gold for as low as Rs100. 

The quarter saw continued policy reforms related to domestic spot gold exchange and international bullion exchange. During Q3, the Securities and Exchange Board of India (SEBI) approved the framework for domestic spot exchange in India. Meanwhile, the International Financial Services Centres Authority (IFSCA) launched the India International Bullion Exchange (IIBX) on 1 October 2021. These exchanges, intended to empower bullion banking and establish India as a major bullion trading hub, may also help with the successful implementation of the gold monetisation scheme and the development of gold-backed products.

Middle East and Turkey

Bar and coin demand in Turkey was sharply lower y-o-y. Demand for small gold bars and coins was 10t – 80% below the record high of Q3’20, although it staged a strong quarterly recovery from Q2’s very depressed level. The gold price remains at historically very elevated levels, at a time when Turkey is plagued by persistent high inflation.  

In a repeat of Q2, Iran – the largest market in the Middle East – was the only country to register y-o-y losses. Bar and coin investment in Iran fell 30% y-o-y to 8t as high inflation and housing costs continued to weigh on demand. Lower gold prices and summer wedding demand offered some support – and help explain the very strong quarterly uplift from the weak Q2. Markets across the rest of the Middle East saw solid y-o-y improvement, likely supported by the price correction mid-quarter. 

The West

Bar and coin investment in the US grew 31% to 29t. Retail investment continued to draw strength from the environment of low interest rates and rising inflation. Furthermore, the combination of rising wages and limited opportunities for discretionary spending increased the disposable incomes available to allocate to gold investment. 

Although the pace of investment slowed from the first half of the year, investment remains very elevated when compared with historical norms: the five-year quarterly average is 13t. Y-t-d investment reached a record of 91t. Q4 has apparently started well, potentially putting the full-year record from 2009 (114t) within reach. 

Europe saw strong growth: up 22% to 58t. Germany was the main driver of growth: demand exceeded the already elevated levels from Q3’20 although did not quite maintain the momentum from the first half of the year. Demand in the UK jumped to more than 5t – the highest for almost 10 years. 


Retail investment in bars and coins in Indonesia increased by 15% y-o-y to 6t. This is the highest in absolute terms since Q4 2014. The stronger appetite for gold bars and coins can be attributed to concerns about inflation, the depreciation of the rupiah against the US dollar, and anticipation of rising gold prices. 

In Thailand, retail investment moved from a net disinvestment of -45.2t to a net positive of 7t in Q3. On a q-o-q basis retail bar and coin demand grew by 18%. Thai investors seem to have taken advantage of an 8% drop in the local gold price. The weakening of the Thai baht against the US dollar has also had an impact, with Thai investors looking to preserve their wealth and hedge against inflation. 

Vietnamese retail investment halved to 2t, significantly below pre-pandemic levels. The significant decline coincides with the timing of COVID lockdowns, but bar and coin demand was slightly cushioned as some major commercial banks could still operate in-store retail gold counters. As with jewellery demand, muted economic sentiment has significantly impacted demand for bars and coins. 

Both Malaysia and Singapore saw a y-o-y decrease in bar and coin demand: down 52% and 23% respectively. This is likely due to a combination of COVID restrictions and economic uncertainty denting consumer confidence. Although economic forecasts have been revised upwards in both markets, this will take time to change consumer sentiment. 

Rest of Asia

Net retail investment in Japan was positive but modest at 2t. Like jewellery, the recent corporate bonus rounds will have boosted demand for bars and coins. The net positive y-t-d investment bucks the recent trend of net disinvestment of bars and coins in Japan. Many people in Japan accumulated gold during the boom of the 1980s, and as these people have retired in recent years many have taken advantage of the significant growth in gold prices.


  1. Based on peak tonnage holdings as of 6 November 2020 of 3,922t (US$245bn)

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