ETF Gold Holdings Surged in March

Global ETF gold holdings surged in March, charting the third straight month of inflows.

Net inflows of gold into ETFs came in at 187.3 tons last month, as total holdings rose to 3,837 tons, just shy of the all-time record high. It was the biggest jump in ETF gold holdings since July 2020, according to data from the World Gold Council.

So far this year, ETFs have added 270.7 tons of gold to their holdings.

Rampant inflation and geopolitical tension boosted gold investment in March. The average price of gold increased from $1,906 per ounce in February to $1,933 per ounce last month.

Gold flowed into ETFs in all regions with funds based in North America leading the way.

North American ETFs added 100.6 tons of gold.

European funds boosted gold holdings by 82.7 tons.

Asian funds reversed the downward trend that started the year and added 2.6 tons of gold.

Gold holdings in funds in other regions including Australia increased by 1.4 tons.

In 2021, gold ETFs saw global outflows of 173 tons, as large North American funds lost assets in line with lower gold prices. The growing realization that the Fed is not going to be able to fight inflation without tanking the economy along with the geopolitical turmoil has given gold a boost through the first three months of 2021.

Inflows of gold into ETFs are significant in their effect on the world gold market, pushing overall demand higher.

There’s a difference between investing in gold-backed ETFs and physical gold. Learn more here.

ETFs are backed by physical gold held by the issuer and are traded on the market like stocks. They allow investors to play gold without having to buy full ounces of gold at spot price. Since their purchase is just a number in a computer, they can trade their investment into another stock or cash pretty much whenever they want, even multiple times on the same day. Many speculative investors appreciate this liquidity.

There are good reasons to invest in ETFs, but they aren’t a substitute for owning physical metal. In an overall investment strategy, SchiffGold recommends buying gold bullion first.

When considering gold-backed ETFs, you should always keep in mind that you don’t actually own the gold. Buying the most common ETFs does not entitle you to any actual amount of the precious metal.