NEW DELHI: In November, global physically backed gold exchange-traded funds (ETFs) recorded net outflows of USD 2.1 billion, marking the first decline in six months.
According to the World Gold Council, this was the largest single-month outflow since April, leading to a 4 per cent drop in total assets under management (AUM) to USD 274 billion.
Collective holdings fell by 29 tonnes (t) to 3,215t during the month, reflecting weaker investor interest amid a declining gold price.
Despite November’s losses, year-to-date (YTD) inflows into global gold ETFs remain positive at USD2.6 billion, with Asia and North America driving the gains.
However, Europe continues to struggle, reporting consistent outflows throughout the year. As a result of November’s losses, YTD global gold ETF demand turned slightly negative at -11t.
Asia experienced outflows of USD145 million in November, breaking its 20-month streak of inflows. China led the decline as a drop in local gold prices dampened investor interest.
However, India bucked the trend, attracting USD175 million in inflows for the eighth consecutive month. Indian investors were drawn to gold amid rising equity market volatility and bullish sentiment toward the metal.
North America posted its fifth consecutive month of inflows, adding USD79 million in November. While early-month outflows in the US were attributed to aggressive risk-on sentiment following the US election outcome, inflows rebounded towards the end of the month.
Factors such as expectations of a weaker dollar, lower bond yields, and geopolitical uncertainties supported the late-month recovery. Increased demand in Canada also contributed significantly to the region’s positive performance.
Europe, on the other hand, saw steep outflows of USD1.9 billion in November, with all major markets in the region recording losses.
The outflows were driven by weaker economic data, concerns over potential trade tariffs from the U.S., central bank rate path uncertainty, and a stronger dollar. The euro and pound also weakened further, leading to additional outflows from currency-hedged gold ETFs.
In other regions, funds reported outflows of USD59 million, ending a five-month inflow streak. Australia led the outflows, driven by strong equity markets, elevated yields, and weaker gold prices.
Global gold trading activity rose for the third straight month, with November’s average daily trading volume increasing by 8 per cent month-on-month to USD290 billion.
This was largely driven by higher trading volumes in futures markets, with the COMEX and Shanghai Futures Exchange recording gains of 50 per cent and 33 per cent, respectively. Gold ETF trading volumes also grew, averaging USD3 billion per day, with North America leading the surge.
However, total net long positions in COMEX gold futures fell by 15 per cent month-on-month to 768t by the end of November. Money managers reduced their positions due to weaker gold prices, lower volatility, and robust equity market performance, which diverted interest away from gold. (ANI)