Gold ETFs See Another Monthly Inflow In June, Says World Gold Council

Global gold-backed exchange-traded funds (ETFs) experienced a second month of inflows in June, according to the World Gold Council (WGC).

Total fund holdings rose by around 18 tonnes last month, to 3,106 tonnes, the body said. In terms of value, inflows came in at $1.4 billion, which meant that assets under management (AUMs) clocked in at $233 billion.

AUMs declined $400 million from May, however, as bullion prices retraced from record highs around $2,450 per ounce the month before.

The WGC said that ” [June] inflows were widespread, with all regions seeing positive gains except for North America which experienced mild losses for a second month.”

It added that “in general, lower yields in key regions and non-dollar currency weaknesses increased gold’s allure to local investors.”

Yet despite May and June’s inflows, the WGC noted that the January-June period represented the worst first-half for global ETFs since 2013.

It said that “both Europe and North America saw hefty outflows while Asia was the only region with inflows.” First-half outflows totalled 120 tonnes, or $6.7 billion.

However, recent inflows and a strong gold price meant that AUMs were up 8.8% year on year.

Falls In North America

In North America — the world’s biggest gold ETF market — holdings dropped by eight tonnes month on month to 1,565 tonnes. In monetary terms, holdings reversed by around $573 million to take total AUMs to $117 billion.

The WGC said that “the dollar strength and continued equity rally may have drawn investor attention away from gold despite falling Treasury yields,” although it added that “flare-ups in geopolitical risk prompted sporadic inflows.”

This meant first-half outflows totalled $4.9 billion, the largest figure for three years.

Europe And Asia Continue Building

Further outflows in North America last month were more than offset by inflows in European and Asian ETFs, however.

In Europe, funds added 18 tonnes of metal to take the total to 1,303 tonnes. AUMs increased to $98 billion thanks to inflows of $1.4 billion.

The WGC said that “lowering yields were a key contributor to the region’s inflows” as central banks either cut rates or hinted at upcoming reductions. The body added that “falling equities and political uncertainties related to elections in the UK and France” also contributed to inflows.

But despite June’s uptick, European ETFs still experienced their worst first half for 11 years, with outflows of $8 billion recorded.

In Asia, gold-backed ETFs enjoyed a seven-tonne inflow (worth $560 million) that lifted total holdings to 179 tonnes. This propelled total AUMs in the region to $14 billion.

The WGC noted that “Asian inflows were mainly driven by China [where] persistent weaknesses in stocks and the property sector, as well as continued depreciation in the renminbi were highly relevant.”

June’s increase was the 16th straight monthly rise for Asian funds, and capped off a strong first half for the region. Inflows of 41 tonnes were the highest on record.