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  • The latest figures from the World Gold Council (WGC) indicate that exchange-traded funds (ETFs) backed by physical gold experienced accelerated outflows in September. Here are the key points from the report:

The latest figures from the World Gold Council (WGC) indicate that exchange-traded funds (ETFs) backed by physical gold experienced accelerated outflows in September. Here are the key points from the report:

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Author

ANDIE ANDERSON
October 19, 2023

  1. Continued Outflows: Funds dedicated to physical gold recorded their fourth consecutive net monthly outflow in September. Outflows totaled 59 tonnes, equivalent to $3.2 billion. This was an increase from the 46 tonnes and $2.5 billion in outflows reported in August.

  2. Total Assets under Management (AUM): Total assets under management in worldwide gold ETFs dropped to $198 billion by the end of September. This decline was exacerbated by a 4% drop in the price of gold during the month.

  3. Global Holdings: Global gold ETFs held 3,282 tonnes of gold at the end of September.

  4. Third-Quarter Outflows: Gold ETFs experienced net outflows of 139 tonnes, equivalent to around $8 billion, in the third quarter of 2023. Year-to-date, global outflows have reached 189 tonnes or $11 billion.

  5. North American and European Outflows: In North America, gold ETFs reported outflows of $2.1 billion (or 35 tonnes) in September. This marked the fourth consecutive month of outflows.

  6. Factors Affecting Gold Performance: The WGC suggests that a combination of higher Treasury yields and a stronger U.S. dollar negatively impacted the performance of gold in September. These factors may have deterred investors from gold ETFs.

  7. Federal Reserve's Role: While the Federal Reserve paused its rate-raising program, the central bank's decision to raise its growth and interest rate forecasts may have intensified investor expectations that interest rates will remain higher for a longer period. This expectation has dimmed interest in gold.

The data indicates that gold ETFs faced significant headwinds in September, driven by a combination of macroeconomic factors, including rising Treasury yields, a stronger U.S. dollar, and shifting expectations regarding interest rates. These factors led to investor outflows and a decline in the price of gold.