At a time when India’s benchmark equity indices are hitting fresh highs every week, statistics around gold price and gold–backed exchange traded funds (ETFs) suggest that the yellow metal has been losing its safe haven sheen in November.

According to data from the London-headquartered World Gold Council (WGC), in November, gold ETFs recorded their first net monthly outflow in twelve months and the second–largest monthly outflow ever.

In its monthly global gold ETF flows’ report, WGC said that gold ETF holdings decreased by 107 tonnes during the month, which works out to $6.8 billion and accounts for 2.9% of assets under management (AUM)—as the gold price had its worst monthly decline of 6.3%, since November 2016, when the yellow metal had dipped 7.4%.

However, November’s lacklustre performance has not undermined the power of gold through 2020 when 916 tonnes of monthly inflows, worth $50.3 billion, ensure that the current year has the highest yearly amount on record. Total global holdings are now at 3,793 tonnes, or $215 billion, WGC noted. In fact, during 2020, gold ETFs have added nearly 50% more assets than the 2009 record of 646 tonnes.

So, what caused the otherwise safe–haven asset to lose its lustre? “Positive equity-market sentiment and a risk-on environment drove gold ETF outflows across all regions during November,” notes WGC. Both, North American (-62.3 tonnes; $3.7 billion) and European funds (-42.4 tonnes; $2.9 billion) lost nearly 3% of assets each, while Asian funds had outflows of 0.4 tonnes ($35 million).

WGC also highlighted that implied volatility, or the expected future price movement of gold, did not increase meaningfully, despite gold’s sell-off in November. “However, put/call (ratio) skew increased to one-year highs and call skew decreased to one-year lows,” WGC noted. “This suggests that while investors may not anticipate large absolute moves in the gold price, they are positioning much more for downside exposure than for upside exposure.”

Also, in WGC’s view, the two major market risk factors—the U.S. Presidential elections and the Covid-19 pandemic—appear to have subsided in November, given a relatively smooth and bi-partisan outcome of the US election and the announcement of successful Covid-19 vaccines.

“This drove risky assets like stocks to all-time highs in some countries, and the MSCI World Stock index had its best monthly performance ever, highlighting the global impact of both developments,” says WGC. “As these two risks subsided, investors reduced hedges, and this was reflected in the gold ETF outflows, higher bond yields, and stock market put/call ratios at extremely bullish levels.”

WGC further affirmed that while one of the drivers of gold demand is diversification in times of market stress, in such circumstances other drivers may come into play and influence pricing. However, the market development organisation for the gold industry pointed at its Gold Demand Trend report for the third quarter of 2020.

In that report WGC had highlighted a common 2020 theme—that a weaker global economy negatively impacted consumer demand for jewellery and technology. “Our recent data suggests that the improving Chinese economy and the festival season in India may have spurred consumer demand,” WGC added in defence of gold.

The correction in gold prices, as well as outflows from gold ETFs, points to the fact that the global investors’ run to safety as far as gold and its safe–haven appeal is concerned is on a gradual decline. Historically, gold has been the hedge assets for investors in times of distress, and the gradual distancing from gold indicates that uncertainties are on a decline as far as the investing world is concerned.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.