Gold ETFs Enjoy Best Month Since 2022 In July, Says World Gold Council

Global gold-backed exchange-traded funds (ETFs) experienced their strongest month for more than two years in July, according to data from the World Gold Council (WGC).

Thanks to inflows across all regions, total holdings increased by 49 tonnes last month, to 3,154 tonnes. In dollar terms, cumulative inflows came out at $3.7 billion, which — combined with a 4% improvement in gold prices over the month — took total assets under management (AUMs) to $246 billion.

Bullion values struck fresh record peaks above $2,485 per ounce in July.

ETFs experienced their third successive month of inflows, the WGC noted. It said that “all regions reported positive flows this month with Western gold ETFs contributing the most.”

Political News Drives Gold Demand

In North America, ETFs added 26 tonnes of the yellow metal in July to push total holdings to 1,591 tonnes. AUMs, meanwhile, improved to $124 billion, helped by inflows of $2 billion.

The WGC said that “July was unprecedented in the political front,” with the assassination attempt on Donald Trump and Joe Biden’s decision not to stand in November’s Presidential election boosting demand for safe-haven gold.

It added that “falling inflation, the cooling labour market and the US Fed Chair Powell’s note that a cut in September is ‘on the table’ during the recent meeting intensified investor expectation of easing soon.”

These factors in turn caused Treasury yields and the US dollar to fall, giving gold demand an additional boost.

European Inflows Soar

In Europe, gold ETFs enjoyed their highest level of inflows since March 2022, the WGC said. These totalled 17 tonnes, and drove cumulative holdings to 1,319 tonnes.

In monetary terms, inflows were worth $1.2 billion, which in turn drove AUMs to $103 billion.

The WGC commented that a Bank of England rate cut, combined with expectations of upcoming action from the European Central Bank, boosted gold funds last month.

In addition, it said that “a commitment to address fiscal challenges from the new UK Chancellor, Rachel Reeves, helped restore some confidence in public finances and contributed to a lowering of UK gilt yields,” which in turn further bolstered appetite for gold.

Asia Records More Inflows

In Asia, ETF inflows rose for their 17th straight month, the WGC said. A five-tonne inflow nudged total holdings to 185 tonnes. AUMs increased to $15 billion, thanks in part to inflows totalling $438 million.

The council said that “strong Indian demand was mainly aided by changes announced in the recent budget which effectively shortens the long term investment qualifying time period and lowered the associated tax rate which makes the investment landscape for gold ETFs more equitable and attractive.”

It added that net inflows were also recorded in China and Japan.