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Global gold ETFs stable in October with Europe higher, US down: WGC

Global gold ETFs stable in October with Europe higher, US down: WGC

Tue Nov 14 2017


Gold-back Exchange Traded Fund holdings remained largely stable in October, with a modest 3.3 mt of bullion added, as inflows into Europe were countered by outflows in North America, according to the World Gold Council this week.


North American funds saw a month of outflows last month, down 8 mt ($305 million) from a total of 1,257 mt held in September, the WGC said in a statement.


Conversely, European funds added 11.2 mt ($523 million) of gold to their portfolios.


Weighing in at 4.1 mt ($170 million) of inflows, the exchange traded commodity fund iShares Physical Gold accounted for the biggest individual accumulation of bullion in Europe, while other euro and pound hedged funds saw similar increases in holdings.


European funds account for 70% of all inflows year to date, according to WGC data.


German ETFs alone made up 37% of total global inflows over the period, with Xetra Gold and Physical Euro Hedged ETC accounting for 32% of global net inflows; between January and October, Xetra Gold added 55.1 mt ($2.3 billion).


The opposing flows in North America and Europe during October occurred on the back of different trends in monetary policy.


While the US market expects a core interest rate hike in December, followed by further increases in 2018, the ECB said earlier this year it would likely keep interest rates low, making gold in Europe -- and especially Germany -- a solid alternative investment product in a low-interest environment, the WGC said.


"Negative rates have definitely played a part in underpinning flows in 2016 and 2017," Alistair Hewitt, director of market intelligence at the WGC, said in the release.