In May 2024, physically backed gold ETFs experienced their first monthly inflow since the same period last year, according to the World Gold Council (WGC). The WGC is an important international trade association focused on the gold industry, founded in 1987 and based in London. Its primary mission is to promote and sustain demand for gold across various sectors by conducting research and providing insights into gold’s economic role and performance. The WGC also launches innovative investment products like the SPDR Gold Shares ETF and sets industry standards promoting transparency and ethical practices.
The WGC’s recent report, “Gold ETF Flows: May 2024,” indicates that inflows into gold ETFs amounted to $529 million in May, driven by a 2% rise in the gold price. Total assets under management for gold ETFs increased by 2% to $234 billion, the highest level since April 2022. While European and Asian funds drove global inflows in May, North American gold ETFs saw negative flows, attributed to a gold price rally that led to outflows due to hawkish Federal Reserve minutes.
European gold ETFs experienced inflows of $287 million in May, ending a twelve-month streak of outflows. These inflows were driven by expectations of a rate cut by the European Central Bank. In Asia, the region saw its 15th consecutive monthly inflow, totaling $398 million in May. China and Japan were significant drivers of the inflows, with record-high local gold prices and weak currencies contributing to the strong demand for gold ETFs in these countries.
The report also highlighted that funds from other regions saw minor outflows, with Turkey experiencing outflows that were offset by gains in South Africa. This information provided by the WGC reflects the shifting dynamics in gold ETF investments globally, showcasing the varying trends and factors affecting gold ETF flows in different regions. Despite the dip in North American gold ETF flows, the overall outlook for gold ETFs seems positive with increased demand and assets under management globally.
Overall, the World Gold Council plays a crucial role in promoting gold as a reliable investment and wealth preservation tool through its market development initiatives and industry standards. By providing insights into gold’s economic role and performance, launching innovative investment products, and promoting transparency and ethical practices, the WGC aims to foster a trustworthy and efficient gold market. The recent positive inflows into gold ETFs signal a potential resurgence in demand for gold as an investment asset, with Europe and Asia leading the global trend in May 2024.
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