WGC notes ETF outflows in October

London (Nov 11)  According to a report by the World Gold Council (WGC), investor appetite for gold continued to diminish on sustained price declines in Aug and Sept as gold-ETFs saw net outflows of 25.5 tonnes or $1.4 billion in October. 

In August and September as gold-backed exchange-traded funds (ETFs) saw net outflows of 25.5 tonnes or $1.4 billion in October, according to report. Outflows of near equal magnitude from Europe and North America were marginally offset by inflows in Asia. Gold ETFs have shown outflows in six of the first 10 months of the year as ETF investors have generally followed gold price trends.

Such funds saw net outflows of 15.2 tonnes or $830 million during September as prices fell on the back of rising yields, a stronger dollar, and a reduction in COMEX-managed money net long positions.

In terms of regions, North American and European gold ETFs both contributed to October’s outflows, led by larger funds in each region. North American funds had outflows of 14.7 tonnes or $817 million mostly because of losses from large US funds.

The report noted, “Year-to-date, gold ETFs have seen global outflows of $9.7 billion (-181 tonnes) as large North American and some European funds have lost assets in line with oscillating gold prices, while low-cost and Asian funds have remained mostly positive,"

Subsequently, the price of gold has risen in the last few days following the rise in U.S. inflation. The SPDR gold trust (GLD:NYSE) gapped up and the volume reached a level not seen since September. There could be a turning point here and ETF volumes should be watched closely.

Reuters