by Mike Maharrey, Gold Seek:
For the first December since 2019, gold-backed ETFs globally reported net inflows of gold.
Asian funds drove the global increase in ETF gold holdings to close out 2024.
On the year, ETF gold holdings dropped modestly by 6.8 tons, but assets under management (AUM) rose by 26 percent to a record high of $271 billion thanks to the skyrocketing price of gold.
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December Gold ETF Data
Asian funds added 8.7 tons of gold last month after reporting decreased gold holdings in October and November. AUM rose by $748 million.
China led the charge as plunging government bond yields and the expectation of further interest rate cuts boosted demand for gold. Investors also worried that an impending trade war could further weaken the yuan. The return to positive gold flows into Chinese ETFs reflected a broader boost in Chinese gold demand.
Indian-based funds reported their eighth consecutive month of inflows. Rising equity market volatility and bullish sentiment towards gold continued to attract Indian investors to the yellow metal.
For the first time in five months, North American gold-backed funds reported outflows of gold in December. ETF gold holdings dipped by 4.7 tons. AUM fell by $342 million.
In the U.S., hawkish messaging coming out of the December Federal Reserve meeting tempered expectations for interest rate cuts next year. Rising bond yields and a strengthening dollar created headwinds for gold in the U.S. According to the World Gold Council, a decline in market activity during the holiday season also contributed to the outflow of gold.
European fund gold holdings were practically unchanged, dropping by 0.3 tons. AUM increased by $337 million.
Increased gold demand in France helped ETF gold holdings remain steady. Ongoing political turmoil drove French investors to seek a safe haven.
Swiss outflows offset French demand. According to the World Gold Council, this was primarily due to FX-hedging products amid a weakening franc against the dollar.
A sharp rise in government bond yields created some headwinds for gold in Germany.
ETF gold holdings in funds from other regions were unchanged in December. AUM rose modestly by $35 million. Australia and South Africa drove the modest dollar inflows.
Annual Gold ETF Data
Every region except Europe reported increases in physical gold holdings in 2024. However, the outflow from European funds was significant, driving global gold holdings negative on the year with total outflows of 6.8 tons.
In dollar terms, AUM by gold-backed funds globally increased by $3.4 billion.
North American funds reported a modest 8-ton increase in 2024. It was the first annual positive gold flow since 2020. AUM increased by $2.3 billion.
Asian funds accumulated an additional 78.4 tons of gold, increasing AUM by $6.4 billion.
Funds in other regions increased gold holdings by 4.7 tons. AUM rose by $500 million.
European funds shed 97.9 tons of gold. Even with the large outflow of gold, it was a significant improvement over 2023 when European funds reported outflows of 180.4 tons of gold. AUM fell by $5.8 billion.
Gold Trading Volumes
Gold trading volumes averaged $221 billion per day across global markets in December. This was a 24 percent month-on-month decline. According to the World Gold Council, lower price volatility discouraged tactical investors at the COMEX and the Shanghai Futures exchange.
