Gold-backed ETFs outflows decelerated in July

According to the World Gold Council, holdings in global gold-backed ETFs and similar products fell by 39t to 2,394t in July, pushing assets under management (AUM) in US dollars down by 4% to US$94bn from US$98bn in June. Gold price performance was a large contributor to outflows as it fell over 2% in US dollar terms.

 

All regions experienced outflows in July. ETF outflows were dominated by North American funds, losing US$984mn. Asia experienced the largest outflows on a percentage basis (6.2%), while Europe reversed the recent trend of inflows, losing 8.0t (US$302mn).

 

COMEX net long futures are the lowest in three years highlighting bearish sentiment in the market. A very low net long level, however, has historically preceded rallies in the price of gold. Looking at the Regional fund flows

1: North American funds saw outflows of 25.0t (US$984mn, 2.1% AUM), 2: Holdings in European funds fell by 8.0t (US$302mn, 0.8%) & 3: Funds listed in Asia decreased by 5.1t (US$220mn, 6.2%), while other regions also saw a reduction in holdings of 0.6t (US$24mn, 1.8%).

 

Year-to-date trends remained as, a: European funds lead the way, adding US$2.2bn (5.3% AUM) to their holdings, 2: Asian funds have seen an impressive percentage increase, growing by 8% y-t-d, but have given up gains over the past two months, 3: North American flows have been negative for three straight months, with US$1.2bn (2.4% AUM) coming out on the year &4: A stronger dollar in Q2 and a declining gold price have weighed on ETF holdings, and global AUM is only slightly higher on the year 22t (US$ 1.0bn, 1.1% AUM).

  

Key: WGC, ETF, Bullion

 

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