Gold ETFs See Outflows In August, But Tailwinds Remain

0
Gold ETFs See Outflows In August, But Tailwinds Remain
flaart / Pixabay

Gold-backed ETFs experienced net outflows of $1.3 billion in August, though selling primarily occurred among a small concentration of major US funds and was triggered by the dollar’s brief strengthening and rising Treasury yields at the beginning of the month, according to new data released today by World Gold Council. Following a recovery in gold prices late in the month, global gold-backed ETF AUM now stands at US$211bn.

Get Our Activist Investing Case Study!

Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!

Q2 2021 hedge fund letters, conferences and more

SALT New York 2021: Wences Casares And Peter Briger On The Macro Case For Bitcoin

BitcoinAt this year's SALT New York conference, Wences Casares, the chairman of XAPO, and Peter Briger, the principal and co-chief executive officer of Fortress Investment Group discussed the macro case for Bitcoin. Q2 2021 hedge fund letters, conferences and more XAPO describes itself as the first digital bank of its kind, which offers the "convenience" Read More

Outflows In Gold ETFs

Additional report highlights include:

  • Regionally:
    • North American funds: declined by US$1.8bn (1.7% AUM) with outflows driven primarily by large US funds for the second consecutive month.
    • European funds: up US$550mn (0.6% AUM). European funds, particularly in Germany and the UK, continued their positive momentum in driving global inflows, driven by Eurozone inflation rising to its highest level in nearly a decade.
    • Asian funds: up US$40mn (0.5% AUM), which can primarily be attributed to a weakness in Chinese equities.
  • Low-cost ETFs remain attractive on a global scale, as they have grown by over 40% YTD and saw a combined US$112mn of inflows across North America and Europe, despite gold price volatility. They now represent approximately 6% of the global gold ETF market.
  • Gold daily trading averages fell to US$141bn per day, while net long positioning in COMEX gold futures increased to US$42bn.
  • Gold price declined slightly, finishing August 0.6% lower at US$1,815/oz behind a rising dollar and higher yields, which rose in response to positive US jobs data and the expectation that the Federal Reserve would implement a tapering of bond purchases this year.

Adam Perlaky, Senior Analyst, comments on the outflows in the gold ETFs.

  • “Despite the recovery in the gold price during the second half of August, outflows were likely driven by changes in momentum and interest rates. The initial selloff, catalyzed by low liquidity conditions, may have unnerved some investors and resulted in lower investment demand. However, gold remains a valuable asset for investors looking forward, as weak equity returns in emerging markets and persistently high inflation reports will serve as tailwinds. September has been one of the strongest months historically for the price of gold, and this could present an opportunity for investors as we head into the fourth quarter of the year.”
  • “Inflows into European and Asian ETFs, in addition to low-cost ETFs, indicate that investor sentiment and investor demand around gold remains strong. Net outflows have primarily been driven by a handful of major North American funds, which have moved in tandem with gold prices. However, gold will remain a critical portfolio hedge for investors, given current market conditions.”

Updated on

Previous article Qualivian Investment Partners 2Q21 Commentary
Next article Delta Air Lines’ $200 Fine Drove Unvaccinated Workers To Get The Shot
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

No posts to display