The outflows from physically backed Gold ETFs (exchange-traded funds) have slowed down in November but their collective holdings are down by 7% in 2023, until November. The month pushed year-to-date (YTD) outflows from global gold ETFs towards $14 billion, with European funds contributing the most.

While global holdings of gold ETFs lowered to 3,236 tonnes, a 9 tonnes decline in November, its total AUM rose by 2% to $212 billion owing to a significant 2% rise in the gold price.

Outlook by region

The North American funds which had been on a Gold ETF dumping streak since June this year have finally attracted net inflows of $659 million in November. In North America, surging Treasury yields between June and October drove outflows of $9 billion during that period, which outweighs inflows of $4 billion during the rest of the year.

The November inflow is on the back of the U.S. Fed's decision to keep rates unchanged for the second consecutive meeting. Since the U.S. is also witnessing decelerations in inflation and a cooling job market, the expectations of the ending of the tightening cycle have further intensified among investors. Not only have the North American funds started favouring investments in Gold ETFs but Gold prices have also gone up, globally.

Europe, the biggest shedder of Gold ETFs this year, saw outflows for the sixth consecutive month, dumping nearly $2 billion in November. European funds’ outflows have piled up to $9 billion in the past 11 months. Rising interest rates in Europe, strengthening of local currencies have diverted investors’ attention away from gold. Germany and the UK led the region’s y-t-d outflows. On the other hand, FX-hedged products, mainly from Switzerland, have contributed to inflows from the region.

Asia is the only region that has been consistent in bringing inflows to Gold ETFs, totaling $1 billion in the current calendar year. China, Japan and India have been the major contributors to the inflow into Asia in this calendar year. Indian and Japanese inflows outweighed outflows from China in November.

Even the accumulated outflows from the other region, barring Asia, North America, and Europe, reached $103 million in the current calendar year.

Gold ETF outlook by country

The highest demand for November was from the US, which saw an inflow of $695.7 million in Gold ETF, equivalent to 10.8 tonnes. The biggest outflow happened from Germany that shed Gold ETFs worth $1,036.3 million, or 15.1 tonnes.

November inflow from India was $46.6 million, or 0.6 tonnes. The Gold ETF holding in India is 42.1 tonnes, equivalent to an AUM of $3.1 billion.   

China, on the other hand, dumped Gold ETFs worth $17.1 million, or 0.3 tonnes, in November, bringing its total holding to 59.9 tonnes and an AUM of $3.9 billion.

The lowest holdings are with Malaysia and Saudi Arabia that hold Gold ETFs worth 0.2 tonnes, each.

Gold Trading

In November, the global gold market daily trading volumes surged 3% month on month and averaged at $174 billion per day. However, gold ETFs trading slumped by 26% and the Over the Counter (OTC) market did not change much. Volumes of other exchange traded products rose by 10% with COMEX being the highest contributor. The positioning on COMEX stood at Net Long, totaling 658 tonnes at the end of November, a 23% increase month on month and 25% above the 2022 average (527 tonne). Money manager net longs also surged, rising by 36% month on month to 449 tonnes, reflecting investors’ positive sentiment amidst the gold price rally.

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