Photo by DAVID GRAY/AFP via Getty Images
AFP via Getty Images
Investors poured more cash into gold-backed exchange-traded funds (ETFs) in September, resulting in the biggest monthly inflow on record, according to the World Gold Council (WGC).
Bullion funds added 146 tonnes of metal last month, up substantially from 53 tonnes in August. This pushed total holdings to 3,838 tonnes, just below November 2020’s all-time high of 3,929 tonnes.
On a monetary basis, September’s inflows totalled $17.3 billion, which – in tandem with the soaring gold price – drove assets under management (AUMs) to a new summit of $472.5 billion.
Last month’s robust result also meant total inflows for the third quarter were the strongest ever for any quarter, at $26 billion.
Gold ETF flows.
World Gold Council
The WGC said that “North American investors led the charge for most of the quarter,” nothing that “at $16.1 billion, the inflow represents the largest Q3 and second largest quarter on record.”
Gold prices rose 17% over the course of the third quarter. It has since struck further record highs, including a new all-time peak of $3,983 per ounce in recent minutes.
Speculation over Federal Reserve rate cuts, combined with signs that the US government shutdown will rumble on, has pushed gold to fresh highs.
Strong North American Demand
The WGC noted that North American funds added 89 tonnes of the yellow metal in September, totalling $10.6 billion. Total holdings rose to 1,966 tonnes at the end of the month, while AUMs appreciated to $245.5 billion.
This was the region’s fourth consecutive month of inflows. The body commented that investor demand is being propelled by “ongoing trade, policy, and geopolitical risks continue to persist with no clear signs of abatement; dollar weakness [which] now faces further pressure from the government shutdown; and expectations of lower yields.”
The WGC added that “[while] equities have reached new highs… we think investors may be positioning themselves for a pullback,” which has further supported demand for safe-haven gold.
European Funds Soar Too
Elsewhere, European gold ETFs enjoyed their third best month of inflows in September, the WGC said.
Regional funds have recorded five successive months of positive flows, with holdings rising by 37 tonnes last month to 1,436 tonnes.
Inflows had a value of $4.4 billion, which pushed European AUMs to $176.6 billion.
The WGC said that “the UK, Switzerland, and Germany again led activity,” noting that “we believe the strong gold price rally has been a key contributor for gold ETF demand across the region.”
It said the Bank of England and European Central Bank kept interest rates unchanged in September while inflation rose, fuelling uncertainty over future monetary policy.
Rises Elsewhere
In Asia, gold ETFs added 18 tonnes of material worth $2.1 billion. Physical holdings rose to 334 tonnes, while AUMs improved to $41.6 billion.
The WGC said inflows were driven by strong demand in China and India, attributing this to “favourable local currency dynamics and increased investment demand as investors look for safe havens amid weaker domestic equities and persistent geopolitical and trade risk.”
In other regions, gold ETFs recorded inflows of just over one tonne, nudging aggregated holdings to 71 tonnes. Inflows were worth $174.9 million, which raised AUMs to $8.8 billion.