In the midst of a volatile yen crisis, a global carry trade sell-off, and anticipation surrounding the Jackson Hole symposium, global physically-backed gold ETFs continued to show confidence in the precious metal during August, adding another US$2.1 billion in inflows. This marked the fourth consecutive month of positive inflows, with Western funds standing out, according to a World Gold Council (WGC) survey.
In August, gold prices rose by 3.6%, which, along with the inflows, pushed global assets under management (AUM) up by 4.5% to a record US$257 billion for month-end. Global collective holdings increased by 29 tons, reaching 3,182 tons by the end of the month.
Thanks to sustained inflows from May through August, global gold ETF losses have been reduced to just US$1 billion for the year. Holdings have decreased by 44 tonnes, while AUM surged by 20% during the first eight months of 2024. Asia has led the way in attracting inflows, with US$3.5 billion, while Europe (-US$3.4 billion) and North America (-US$1.5 billion) have experienced outflows.
Regional Breakdown of Gold ETFs
North America:
In North America, gold ETFs recorded US$1.4 billion in inflows in August, marking the second consecutive month of positive movement. Analysts point to moderating inflation, a cooling labor market, and dovish signals from the Federal Reserve’s meeting minutes and Jerome Powell’s speech at Jackson Hole, which solidified expectations for a rate cut in September. As a result, both the 10-year U.S. Treasury yields and the U.S. dollar experienced sharp declines, driving further investment into gold ETFs. WGC analysts noted that geopolitical tensions in the Middle East and the ongoing conflict between Russia and Ukraine also contributed to inflows.
Europe:
European funds attracted US$362 million in August, marking their fourth consecutive month of inflows, although at a slower pace than previous months. Funds listed in Switzerland and the UK led the inflows. Volatility in global equity markets, driven by concerns over the “yen carry trade” unwinding, likely spurred safe-haven demand, boosting inflows into gold ETFs. In addition, prospects of further interest rate cuts by European central banks may have provided additional support, especially as geopolitical risks intensified in the region.
Asia:
Asian funds extended their inflow streak to 18 months, though the addition of US$32 million was the smallest since May 2023. India led the region in inflows, posting its strongest month since April 2019, driven by momentum from the July budget announcement and local gold price strength. Japan also saw notable inflows for the sixth consecutive month, likely due to equity market volatility and lower government bond yields. In contrast, China saw outflows, ending its eight-month streak of inflows.
Other Regions:
In August, funds from other regions recorded their third consecutive month of inflows, totaling US$264 million—the largest on record. South Africa, in particular, recorded its biggest monthly inflow, likely driven by falling yields and expectations of a domestic rate cut due to lower-than-expected inflation. Australia also saw its third straight month of inflows.
Gold Market Leaders
The largest gold ETFs are primarily based in the U.S., with holdings exceeding 1,540 tonnes and managing around US$125 billion. The UK follows with 599 tonnes and US$49 billion, with Switzerland and Germany holding 326 and 324 tonnes respectively, valued at around US$26 billion. In total, North America manages over 1,608 tonnes and US$130 billion, while Europe holds 1,327 tonnes and US$107 billion, and Asia has 184 tonnes and US$15 billion.
The largest ETF is the SPDR Gold Shares ETF, holding over 862 tonnes, followed by the SPDR Gold MiniShares Trust with 108 tonnes, both based in the U.S. Other notable funds include the Canadian BMO Gold Bullion ETF, the British iShares Physical Gold ETC, and the South African NewGold Issuer Ltd.
In terms of gold trading volume, in August, an average of US$241 billion was traded daily, with US$158 billion traded over-the-counter (OTC).