Gold ETFs Surge in July 2024: Record Inflows and Investor Demand

In July 2024, global gold ETFs witnessed robust inflows, marking their strongest month since April 2022. These inflows, totaling US$3.7 billion, extended a streak of three consecutive months of positive net flows. Western regions, particularly North America and Europe, led this surge, supported by a 4% rise in the price of gold, which propelled total assets under management (AUM) to a new high of US$246 billion by month-end.

Global Overview Global physically-backed gold ETFs recorded substantial inflows across all major regions in July. Western markets, including North America and Europe, contributed significantly to the US$3.7 billion total inflow. This increase, coupled with a 6% rise in total AUM to US$246 billion and a net addition of 48 tonnes of gold holdings, underscores renewed investor interest amidst a strengthening gold market.

Year-to-Date Performance Despite earlier setbacks in 2024, the recent inflows have narrowed the year-to-date losses for global gold ETFs to US$3 billion. Although collective holdings decreased by 72 tonnes year-to-date, the 15% increase in AUM reflects strong support from a 17% rise in gold prices, signalling a robust recovery in investor sentiment.

Regional Insights

North America: North American funds experienced a notable turnaround with US$2 billion in inflows during July, reversing previous outflows. This resurgence coincided with heightened market volatility amid significant political developments and expectations of forthcoming rate cuts by the Federal Reserve. Despite a cumulative outflow of US$2.9 billion year-to-date and a reduction of 52 tonnes in holdings, the region's AUM grew by 14% in 2024.

Europe: Europe saw its strongest inflows since March 2022, attracting US$1.2 billion in July. The United Kingdom and Switzerland led this surge, supported by declining government bond yields and monetary policy expectations favouring further easing. Despite a year-to-date outflow of US$3.7 billion and a reduction of 66 tonnes in holdings, European funds posted a 12% increase in AUM, buoyed by a record high gold price and renewed investor confidence.

Asia: Asian markets extended their inflow streak to 17 consecutive months, attracting US$438 million in July. India led the region in inflows, driven by favourable budgetary changes and a strong local gold price. Despite a slight slowdown in July, Asia's year-to-date inflows of US$3.6 billion have significantly outpaced other regions, contributing to a record AUM of US$15 billion and an increase of 47 tonnes in collective holdings.

Other Regions: Other regions, including South Africa and Australia, also reported mild inflows during July. Political uncertainties in South Africa and favourable local currency dynamics in Australia supported these inflows. Year-to-date, funds in these regions saw combined inflows of US$40 million, largely attributed to South Africa.

Market Dynamics July witnessed a substantial increase in trading volumes across global gold markets, with average daily volumes reaching US$250 billion. This surge, up 27% from June and well above 2023 averages, was driven by robust over-the-counter (OTC) trading and a 51% increase in exchange-traded derivatives trading, particularly on COMEX. Notably, COMEX gold futures saw net long positions rise to their highest levels since February 2020, fueled by persistent strength in gold prices and market expectations of lower interest rates.

Conclusion July 2024 marked a significant resurgence for global gold ETFs, driven by strong inflows across Western and Asian markets amid favourable market conditions and rising gold prices. Despite earlier challenges in 2024, the sector's robust performance in July underscores renewed investor confidence and underscores gold's role as a safe-haven asset amidst global economic uncertainties.

Methodology Note Data for this analysis was sourced from Bloomberg, company filings, ICE Benchmark Administration, and the World Gold Council, reflecting comprehensive insights into global gold ETF flows and market dynamics.

By refining the structure and focusing on key insights, this revised article aims to provide a clear and detailed overview of the July 2024 performance of global gold ETFs.

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