Gold ETFs clock 8th consecutive month of positive flows, says WGC

Gold ETFs and similar products recorded their eighth consecutive month of positive flows, adding 166 tonnes in July -- equivalent to $9.7 bn or 4% of AUMs, the World Gold Council said

Gold-backed exchange-traded funds (ETFs) and similar products recorded their eighth consecutive month of positive flows, adding 166 tonnes in July -- equivalent to 9.7 billion dollars or 4 per cent of assets under management (AUMs), the World Gold Council has said.

Global holdings have once again reached a new all-time high of 3,785 tonnes and the price of gold hit a record high of 1,976 dollars per ounce by the July-end, leaving global AUMs standing at 239 billion.

Global net inflows of 899 tonnes (49.1 billion dollars) to date are considerably higher than previous annual highs, and the trend of inflows has continued in the first few trading days of August as the price of gold has breached 2,000 dollars per ounce.

While all regions had net inflows in July, North American funds once again led by a significant margin accounting for 75 per cent of global net inflows. The region added 118 tonnes (7 billion dollars, 5.5 per cent AUMs).

European-listed funds added 40 tonnes (2.1 billion dollars, 2.1 per cent AUMs). Asian-listed fund holdings rose meaningfully during the month by 4.9 tonnes (370 million dollars, 5.6 per cent AUMs). Funds listed in other regions registered a 3.4 tonnes gain (218 million dollars, 5.5 per cent AUMs) increase.

Global gold trading volumes rose sharply to 194 billion dollars a day in July, up 24 per cent from 167.6 billion dollars in June, said the World Gold Council in its latest update.

The current market environment highlights the multi-faceted nature of gold price behaviour. Economic weakness has significantly hurt jewellery, bar and coin and technology demand which have averaged 86 per cent of total gold demand over the past 10 years.

But geopolitical and economic uncertainty remains supportive for gold investment, and with real rates near or at all-time lows globally, the cost of holding gold remains low.

Finally, investment demand and momentum appear to be more than offsetting the shortfall from the economic weakness side.

With the recent demand shift, said the World Gold Council, only 32 per cent of demand came from jewellery, bar and coin and technology in Q2 with the remainder coming from investments -- like gold ETFs -- and central banks.