Outflows in gold ETFs continued!
Holdings in global gold-backed ETFs and similar products fell by 40t to 2,353t in August – the third consecutive month – pushing assets under management (US$ AUM) down 3% relative to July. Funds listed in China had net gains as investors hedged trade risks and currency weakness. Flows in Europe were mostly flat. Global outflows were led by North American funds which lost US$1.65bn.
Recent reports of COMEX futures show extreme short positioning as gold’s pullback generated additional selling pressure from money managers. But such negative positioning, however, has historically preceded rallies in the price of gold, as we discussed in detail in our recent note Gold recoils amid selloff but may rebound.
Looking at Regional fund flows, North American funds saw outflows of 44t (US$1.65bn, 3.6% AUM), Holdings in European funds grew by 4t (US$167mn, 0.4%), Funds listed in Asia increased by 2t (US$24mn, 0.7%) & other regions saw a reduction in holdings of 2t (US$50mn, 3.9%).
Individual flows moment found at, SPDR Gold Shares (GLD) continued to experience significant outflows of US$1.7bn or 6% of assets. In China, Bosera Gold led inflows globally, adding 5t (US$191mn, 19%); also in China, Huaan Yifu lost 4t (US$166mn, 22%), Xtrackers in Germany and ETF Physical Gold in the UK grew by 3t and 2t respectively!
South Africa’s New Gold lost 6% of assets as the rand fell over 12% vs the US dollar, Turkey’s largest gold-backed ETF, Istanbul Gold lost 6% of its assets in the face of significant currency volatility: the Turkish lira fell more than 33% during the month!
Year-to-date trends observed that, a stronger US dollar over the past two quarters and a declining US dollar gold price have weighed on ETF holdings; global AUM is lower on the year by 18.5t (US$530mn, 0.6%). European funds continue to lead inflows, adding US$2.3bn (5.8% AUM) to holdings.
Asian funds have seen an impressive percentage increase, growing 9.1% y-t-d & North American flows have been negative for four straight months as the price of gold has fallen, with US$2.8bn (6.1% AUM) coming out during the year!
