The World Gold Council this week has published data on the gold-backed holdings of exchange-traded funds for October.
This data is imperative for gold financial specialists, because helps analysts make their estimates for the future price of the yellow metal.
The ETFs closed the month of October with a volume of 2,345.6 tons, reflecting 16.6 tons of accumulation or a 0.71% increase from September. The funds reported monthly inflows of $999.4 million. The value of gold assets under management was $91.6 billion, which is 3.04% upside from September.
In October, North American gold-backed ETFs increased their gold holdings by 12.4 tons to 1,185.8 tons, mirroring a 1.07% increase from September. North American funds had inflows of about $561.4 million for a total value of $46.3 billion of gold assets under their management. The increase was the result of a 2.33% rise in the price of gold to $1,214.95 per troy ounce at close on Oct. 31, from $1,187.25 per troy ounce at close Sept. 28 on the London bullion market.
Since the financial crisis of 2008, the month of October was the worst that worldwide stock markets have seen, prompting investors to fly from higher-risk investments to safer havens such as gold and U.S. Treasuries, driving the price per ounce of gold higher.
A rising commodity also drove an accumulation of 10.5 tons in European gold-backed ETFs, leading to a total volume of 1,048.4 tons at the end of October for a 1.01% upside from the end of September. The total value of gold assets under the management of the European funds increased to $41 billion, indicating a 2.2% appreciation from September.
Furthermore, to reduce or eliminate the exposure of European funds to the movement of the foreign currency, managers of European funds have made investments that moved in the opposite direction of the base currency of the funds. It is not by chance that nearly 35% of the European inflows came from euro- and franc-hedged funds.
Holdings of Asian gold-backed ETFs decreased by 6.5 tons or 7.6% for a total volume of approximately 79 tons of gold assets under management, which were valued at $3.1 billion at the end of October. The value of gold assets under the management of Asian funds declined 6.1%. Outflows totaled $258.8 million.
Negative performance of Chinese funds was driven by investors preferring to take some profit off the table as the price of gold in the Chinese currency increased approximately 5% from September to October.
ETFs in other regions experienced growth of 0.2 tons of the yellow metal in October, resulting in inflows of $18.5 million. At the end of October, funds in other regions accounted for 32.6 tons of gold assets under management for a total value of $1.3 billion. The total holdings under the management of other regions increased 8.3%.
The chart below illustrates the geographic distribution of total gold assets under the management of exchange-traded funds around the globe:
The top three inflows to gold-backed ETFs were:
The SPDR Gold Shares (GLD, Financial) accumulated 11.8 tons in October for a total volume of 753.8 tons. The U.S. fund reported inflows of $475.2 million. The total volume of gold assets under management increased nearly 1.6%.
The iShares Gold Trust (IAU, Financial) experienced the second-largest inflows. The U.S. fund reported inflows of $198 million. It amassed 5 tons of gold for a total 272.5 tons of gold assets under management, a nearly 1.9% increase from September.
The Chinese HuaAn Yi Fu Gold (518880, Financial) ended the month of October with 20 tons of gold assets under its management after having amassed about 4.7 tons. Inflows to the fund were $186.4 million. The total volume of gold assets under management of the Chinese fund rose 30.7%.
The three large outflows in the gold-backed ETFs were:
China's Bosera Gold Exchange Trade Open-End Fund ETF reported a meaningful loss with outflows of $466.7 million. The Shenzhen-headquartered fund unloaded 11.9 tons. At the end of October, the fund held 12 tons of gold, marking a 49.8% decline from the previous month.
The Toronto-based Sprott Physical Gold Trust (TSX:PHYS) fund reported outflows of $87.3 million because of a 4.8% decrease in the total volume of gold assets under management. The North American fund reduced its holding by 2.5 tons to a total volume of 49.8 tons of gold.
The Central Fund of Canada Ltd. decreased its gold assets by 5.8% or 2.6 tons. At the end of October, the Canadian fund had 42.6 tons of total gold assets under its management. The fund reported an outflow of $61.4 million.
Thanks primarily to higher commodity prices, October has been positive for North American, European and other regions' gold-backed ETFs. But the previous six months of outflows from the North American funds were still too strong for inverting the year-to-date global trend. Neither could another month of net positive inflows in European funds change the trajectory.Â
For the 10 months through October, gold-backed exchange traded funds globally have unloaded 25.8 tons of gold and recorded outflows for $399.2 million.
Disclosure: I have no positions in any securities mentioned.
