WGC: Gold ETFs Notch Best Performance Since April 2022

The World Gold Council's latest gold exchange-traded fund (ETF) statistics show a sentiment shift in the west.

Up until July, western investors had largely abandoned gold ETFs in 2024. Some took profits amid record gold price levels, while others favored interest-bearing assets, which have been supported by high interest rates.

The council's July data shows a reversal, with global gold ETFs experiencing their strongest month since April 2022.

Inflows topped US$3.7 billion for the month, the third month in a row of inflows for gold ETFs. Western investment took the lead, with more than US$2 billion entering the market from North America and US$1.2 billion from Europe.

The shift in sentiment came as more economists began predicting a 25 to 50 basis point cut from the US Federal Reserve when it next meets in September. Investors may also be seeing this as a good time to move to safe-haven investments like gold due to heightened tensions in the Middle East, as well as increasing fighting between Russia and Ukraine.

Although outflows have erased 72 metric tons (MT) from the world's gold ETF holdings year-to-date, the World Gold Council notes that the higher gold price has narrowed global losses to US$3 billion.

In July, North American gold ETF holdings rose 25.7 MT to hit 1,590.6 MT, while European gold ETF holdings saw an increase of 16.6 MT to reach 1,319.3 MT. Demand in Asia continued to remain positive, with 5.3 MT added to holdings, a monthly increase of 3 percent. Overall, the US led the way with a monthly increase of 25.6 MT.

Western funds dominated the top 10, with the Xtrackers IE Physical Gold ETC (LSE:XGDU) recording an increase of 17.8 MT for the month. The SPDR Gold Trust (ARCA:GLD) was the top North American fund with 17 MT of demand.

However, there were still significant outflows, particularly from European funds. The Xtrackers Physical Gold ETC EUR (BIT:XAD5) saw losses of 13.7 MT, and the Invesco Physical Gold GGBP Hedged ETC (LSE:SGLS) fell by 8.2 MT.

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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.