Gold ETFs See Major Inflows in May 2024: WGC Reports $529 Million Surge

• In May 2024, physically backed gold ETFs saw their first monthly inflow since the same period in the previous year, according to the World Gold Council (WGC).
• The World Gold Council is an international trade body established in 1987 with the mission of promoting and sustaining gold demand.
• “Gold ETF Flows: May 2024,” a report by the WGC, highlighted inflows amounting to $529 million driven by a 2% rise in gold price, increasing total AUM to $234 billion.

Discover the latest trends in gold ETFs with the World Gold Council’s comprehensive report on May 2024 inflows, revealing significant regional dynamics and market shifts.

Gold ETFs Witness First Monthly Inflow Since Previous Year

In a significant development, May 2024 marked the first monthly inflow for physically backed gold ETFs since the same period last year, the World Gold Council (WGC) revealed. The WGC, a major international trade association focused on the gold sector, indicated that these inflows amounted to a substantial $529 million. This was largely attributed to a stronger gold price, which appreciated by 2%, thus elevating total assets under management (AUM) for gold ETFs by 2% to a notable $234 billion. This level of AUM has not been seen since April 2022.

European and Asian Funds Drive Global Inflows

According to the WGC’s report, European and Asian funds were at the forefront of global inflows. Asia experienced its 15th consecutive month of positive inflows, while Europe saw its first positive flow in a year. In contrast, North American funds turned slightly negative for the month. The growing demand for gold ETFs in May led to collective holdings rebounding to 3,088 tonnes, though it remained 8.2% below the 2023 average. Such trends underscore the significant regional variations affecting global gold ETF investments.

Intricacies of Regional Gold ETF Movements

North American ETFs saw outflows of $139 million in May, ending a streak of positive inflows from the previous two months. According to the WGC, these outflows, though the smallest since December 2019, resulted from a gold price rally leading to the exercise of in-the-money calls, which generated net share creations and inflows. Nonetheless, hawkish minutes from the Federal Reserve towards the end of the month dampened gold prices, contributing to the outflows observed.

European ETF Recovery Amid Varied Economic Sentiments

Europe’s gold ETFs recorded inflows of $287 million in May, breaking a twelve-month cycle of outflows. The WGC attributed these inflows to speculations of a rate cut by the European Central Bank, benefiting funds particularly in Switzerland and Germany. On the other hand, UK-listed funds faced outflows driven by political instability and inflation worries. These diverging trends illustrate the complex economic landscape impacting European gold ETF investments.

Continuous Growth in Asian Markets

Asia witnessed its 15th consecutive month of gold ETF inflows, amounting to $398 million in May. China played a pivotal role, contributing $253 million in inflows due to record-high local gold prices and a weak local currency. Japan followed with significant inflows supported by favorable local gold prices. These consistent inflows highlight Asia’s burgeoning demand for gold ETFs, driven by regional economic conditions and market dynamics.

Other Regional ETF Trends

The WGC reported minor outflows from funds in other regions, predominantly Turkey, which offset gains observed in South African ETFs. These fluctuations reflect the intricate and shifting dynamics within global gold ETF investments as reported by the WGC.

Conclusion

Overall, the World Gold Council’s insights into May 2024’s gold ETF inflows illuminate significant regional trends and market dynamics. With Europe and Asia leading the inflows, and contrasting movements in North America, the data provides a nuanced perspective on the geopolitical and economic factors influencing gold investments globally. Investors and stakeholders can leverage this information for strategic decision-making in a continually evolving market.