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Global gold-backed ETF holdings fall significantly in July

Global gold-backed ETF holdings fall significantly in July

Tue Aug 07 2018


Holdings in global gold-backed exchange-traded funds (ETFs) and similar products fell by 39 t to 2 394 t in July, the World Gold Council (WGC) reported on Tuesday.


This has pushed assets under management (AUM) down to $94-billion from $98-billion in June.


The WGC attributed the outflows to the gold price performance, as the price of gold fell over 2% in dollar terms.


All regions experienced outflows in July, but ETF outflows were dominated by North American funds, losing $98-million (25 t).


Asia experienced the largest outflows on a percentage basis (6.2%), losing $220-million, while Europe reversed the recent trend of inflows, losing 8 t, which translates to $302-million.


The world’s largest physical futures trading exchange COMEX’s net long futures are the lowest in three years, highlighting bearish sentiment in the market, the WGC reported.


However, it added that “a very low net long level has historically preceded rallies in the price of gold.”


Despite last month’s fall, European funds added $2.2-billion to their holdings year-to-date, while Asian funds’ inflows grew by 8%.


While significantly impacting on global AUM, North America’s three months of negative flows, a stronger dollar and a declining gold price were not enough to offset inflows in Europe and Asia, as global AUM improved by 1.1% year-to-date.