Gold ETFs See Worst H1 Since 2013

Chennai: Global gold exchange-traded funds (ETFs) have lost $6.7 billion in the first half of calendar year 2024, suffering their worst first half in a calendar year since 2013, according to the World Gold Council.

Total holdings of gold ETFs have dropped by 120 tonnes or 3.9 per cent to 3,105 tonnes during this period. A stronger gold price and recent inflows pushed the total AUM to $233 billion, but collective holdings remain near their lowest since 2020.

Although June and May inflows helped limit global gold ETFs’ y-t-d losses to $6.7 billion, this remains the worst H1 since 2013 – both Europe and North America saw hefty outflows while Asia was the only region with inflows.

Western gold ETF investors did not react as anticipated to the rise in the gold price – which commonly drives up investment flows – amidst a high level of interest rates and a more risk-on sentiment generated by the AI boom. In contrast, Asian flows rhymed with the price strength – weaknesses in non-dollar currencies and gold’s staggering performance in those currencies attracted investors in the region.

“While Asian funds attracted a record $3 billion during the first half of 2024 (H1-CY24), they were significantly outpaced by collective outflows in North America and Europe to the tune of $9.8 billion," WGC said.

Asian inflows were mainly driven by China, which added $429mn in the month. Japan also witnessed its 16th consecutive monthly inflow in June. Indian gold-ETFs recorded a net inflow of Rs 726 crore in June as the total AUM went up to Rs 34,355 crore.