Gold ETF Flows: March 2024

Outflows narrowed in March

Regional and fund-specific analysis of gold holdings and flows in USD.

Gold-backed ETFs and similar products account for a significant part of the gold market, with institutional and individual investors using them to implement many of their investment strategies. Flows in ETFs often highlight short-term and long-term opinions and desires to holding gold. The data on this page tracks gold held in physical form by open-ended ETFs and other products such as close-end funds, and mutual funds. Most funds included in this list are fully backed by physical gold.

Highlights

• Outflows from global gold ETFs continued in March, but at a much slower pace than previous months as North American and Asian inflows cushioned European losses.
• While collective holdings fell further (-14t), total AUM in global gold ETFs rose by 8% thanks to a stronger gold price.
  Low-cost ETFs lost US$469mn in March: North American inflows (+US$128m) were outpaced by European outflows (-US$594mn).
• During the first quarter global gold ETF outflows piled up to US$6.5bn, led by North America and Europe while Asia attracted the largest inflows. Low-cost funds saw outflows of US$893mn in Q1, mainly driven by Europe (-US$728mn).

March in review

Global physically backed gold ETFs1 witnessed their tenth consecutive monthly outflow in March, losing US$823mn. But by comparison this is far less than February outflows (-US$2.9bn) and the average of the past nine months (-US$2.4bn). Collective holdings fell by 14t to 3,112t by the end of March, the lowest since February 2020 and 21% lower than the month-end record of 3,915t in October 2020. However, helped by a jump in the gold price, total assets under management (AUM) rose to US$222bn, an 8% increase during the month, the highest in 21 months.

All regions except Europe saw inflows in March. Flows in North America flipped back to positive for the first time in 2024. Asia and the Other region also capped inflows. But these were offset by European losses.

March regional overview

North American funds saw a turnaround in March, adding US$360mn. Inflows were mainly driven by activities in the options market: the gold price rally triggered exercises of in-the-money calls in mid-March, creating sizable inflows. Meanwhile, the market viewed the US Federal Reserve’s March comments as dovish, spurring further inflows around the time of the Fed’s meeting as yields and the dollar both lowered. Nonetheless, demand would have been stronger if investors didn’t sell their holdings in early and late March, taking advantage of gold price advancements.

March narrowed North American funds’ y-t-d outflows to US$4.3bn. Nonetheless, it remains the region with the largest outflows in Q1. Large and liquid funds suffered the heaviest losses during the period. But supported by a strong gold price the region’s total AUM rose to US$112bn, the highest since June 2022.

March marked the tenth consecutive monthly outflow from European funds (-US$1.4bn). The UK accounted for the bulk of the loss despite the Bank of England’s dovish tilt in its March meeting, which led to lower government bond yields and a weaker pound. Taking a closer look, although scattered inflows were evident when the gold price surged, outflows emerged when gold’s momentum paused – likely due to profit-taking activities. And as major central banks – including the European Central Bank and the Swiss National Bank – edged towards or actually started rate cuts, investor risk appetite improved and interest in gold diminished.

Gold ETF demand in Germany improved further, attracting inflows for the first time in 5 months. As noted previously, the worsening economic conditions may have pushed up local investor safe-haven demand.

European funds have seen outflows of US$2.9bn so far in 2024. While collective holdings dropped to the lowest in 51 months, total AUM rose by 6.4% during the quarter in the face of a higher gold price. The UK, Switzerland and Germany lost the most in Q1.

Asia registered non-stop inflows for the 13th month, attracting US$217mn in March. China once again led inflows as the local gold price rally attracted investors. Japan also recorded positive flows. Asian funds led global inflows in Q1 2024 by adding US$678mn, a 7% rise in holdings and a 14% jump in AUM, again boosted by a higher gold price. The Other region saw a mild US$23mn gain in March, leading to a US$7mn inflow y-t-d.