Gold ETF Flows: January 2019

Global gold-backed ETFs continued their strong growth in January


Holdings in global gold-backed ETFs and similar products rose in January by 72 tonnes(t) to 2,513t, equivalent to US$3.1bn in inflows, marking the fourth consecutive month of net inflows. Notably, total holdings have not been this high since March 2013, when the price of gold was 22% higher. Global gold-backed ETF holdings have grown 6% over the past two months, driven by market uncertainty and a shift in sentiment that drove the price of gold 3.5% higher in January alone. Global assets under management (AUM) rose by 6% in US dollars to US$107bn over the month.


ETF monthly flows

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

January flows were positive in North America, Europe, and Asia, North American funds led global inflows as momentum investors moved into the most liquid US-based funds, while other investors increased holdings in low-cost ETFs2; we believe this is linked to strategic allocations. Brexit uncertainty was a primary driver of investment demand in the UK and Europe.

Global stock markets rebounded off the Christmas Eve low and finished the month up ~7% on average – the strongest monthly start to the year since 2003. However, market uncertainty remains a concern, especially as the impact of the US Government shutdown is yet to be assessed, Brexit is far from being resolved and trade negotiations continue. In addition, the Fed has signaled a ‘wait and see’ approach and other central banks may follow suit. We anticipate this will support gold prices (see our 2019 Outlook).

Gold trading volumes increased in January on par with 2018 averages. Sentiment and positioning in COMEX futures is unclear at this point as the CFTC has not provided an update to positioning since mid-December; a consequence of the US Government shutdown. We believe that net longs increased yet remain below historical averages. We discussed bearish positioning in futures and how this historically precedes strong rallies in the price of gold.

Regional flows1

North American inflows represented 72% of global inflows

  • North American funds had inflows of 53t (US$2.2bn, 4.0% AUM)
  • Holdings in European funds rose by 20t (US$902mn, 1.9%)
  • Funds listed in Asia increased by 0.1t (US$3mn, 0.1%)
  • Other regions saw a decrease in holdings of 1.3t (US$62mn, 4.6%)

Individual flows

SPDR® Gold Shares and iShares Physical Trust led global inflows

  • In North America, SPDR® Gold Shares led global inflows, gaining 36.2t (US$1.5bn, 4.7%), followed by iShares Gold Trust, which added 12.3t (US$512mn, 4.4%)
  • Low-cost gold-backed ETFs in the US continue to add assets led by Graniteshares Gold Trust 2.9t (US$119mn, 38%) and SPDR® Gold MiniShares 2.5t (US$106mn, 27%) 2
  • European inflows were led by ETFs Physical Gold 9.7t (US$406mn, 6.1%) and Xetra, which added 8.2t (US$338mn, 4.5%)
  • In China, Huaan Yifu continued to add assets 1.0t (US$44mn, 4%), while Bosera Gold lost minimal assets 0.4t (US$18mn, 4.8%)

Long-term trends

When global gold-backed ETFs last held this much gold, its price was 22% higher

  • Fund flows strongly reversed the Q3 2018 declines with collective inflows of 185t (US$8.0bn, 9%) over the past four months
  • Total holdings in tonnes (2,513), have not been this high since March 2013, when the price of gold was 22% higher
  • Low-cost ETFs added 16t (US$~700mn) in the past six months, representing growth of 53%2


  1. Note: 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 of how much investment reaches the funds. This year, the reported flows measured in tonnes of gold and their dollar value equivalent seem inconsistent across regions. Both figures are correct. The disparity is due to the interaction between the performance of the gold price intra-month, the direction of the dollar and the timing of the flows. For example, Europe experienced outflows early in the month when the price of gold was low but gained assets later in month when the price of gold increased.

  2. Low-cost US-based gold backed ETFs are defined as gold-backed ETFs that trade on US markets with annual management fees of 20bps or less.

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