Gold Market Structure and Trends

Physically-backed gold ETFs saw net outflows of US$2.3bn in July, equivalent to a 34t reduction in holdings. Despite this, total assets under management (AUM) increased by 2% m/m to US$215bn as a rebound in gold price more than offset negative flows.

Central bank buying slowed in Q2 but remained resolutely positive. This, combined with healthy investment and resilient jewellery demand, created a supportive environment for gold prices.

India is one of the world’s largest gold bar and coin markets. Investment demand for gold is driven by its safe-haven appeal and the ability to convert these products into jewellery at a later stage.

Global gold ETFs experienced net outflows of US$3.7bn (56t) in June, calling a halt to their three-month inflow streak. June’s outflow caused global gold ETF demand during H1 2023 to turn negative, leaving collective holdings of global gold ETFs at US$211bn (3,422t).

Global gold ETFs saw the third consecutive monthly inflow of US$1.7bn, primarily driven by the gold price strength in early May and uncertainties around the US debt ceiling negotiations. May took y-t-d global gold ETF flows to positive territory at US$1bn, led by North American funds.

Global gold ETFs continued to see positive demand in April: net inflows totalled US$824mn while holdings increased 15t. North American funds led global inflows, adding nearly US$1bn. Fund flows in Europe turned negative again in the month (-US$223mn), led by Germany.

Continued momentum in central bank buying and resurgent Chinese consumer demand contrasted with a negative contribution from ETFs and weakness in India.

Global physically backed gold ETFs saw net inflows of US$1.9bn in March - the first inflows for ten months - as the banking crisis fuelled demand. But the recent inflows were not enough to prevent a net quarterly outflow of US$1.5bn. Regionally, European funds accounted for the bulk of the global outflows in Q1.