Commodities Buzz: Global Gold ETFs See Inflow Of 46.3 Tonnes In January

8 Feb 2022 , 09:16 AM

The World Gold Council (WGC) stated yesterday that Global gold ETFs drew net inflows of 46.3t (US$2.7bn, 1.3% of AUM) in January, led by North American funds – partially offsetting the region’s 2021 outflows. These combined with positive flows from Europe significantly outweighed Asian outflows. Overall, net inflows were driven largely by gold price strength and a sharp selloff in equity markets, despite a reversal in the gold price on the back of a hawkish US Fed statement towards the end of the month.

North American inflows of 49.0t (US$2.9bn) were concentrated in US funds, which tend to be more reactive to changes in the gold price than other regions. Additionally, a significant jump in the gold price leading up to gold ETF options expiration likely contributed to some of the inflows. This resulted in positive flows as gold rallied by nearly 3% in the first part of January to reach an intra-month high of US$1,847/oz. The majority of US inflows coincided with this move, supported by a flight-to-quality amid a selloff in equity markets.

Similarly, growth in European funds 6.7t (US$385mn) came on the heels of reports showing inflation remained elevated and above expectations for January. North American and European inflows significantly outweighed outflows from Asia, where funds lost 9.9t (-US$589mn) during the month. Outflows from Asia were driven by Chinese ETFs as investors reduced gold holdings ahead of the Chinese New Year while the gold price weakened towards the end of the month. Funds in India also experienced outflows given headwinds from rising local bond yields. Other regions did however attract inflows of US$27mn (0.5t) in January.

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