Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Gold Continues to Flow into ETFs with European Funds Leading the Way

  by    0   0

After surging in August and September, inflows of gold into gold-backed ETFs flattened, but remained in positive territory in October.

Global gold-backed ETF funds added 3.3 tons of gold last month, as inflows into European funds offset outflows in North America. according to the latest report by the World Gold Council

ETFs in Europe took in a healthy amount of gold in October, as investors added 11.2 tons with a value of around $523 million through funds listed in the region. There were outflows in North America of -8.0 tons, reversing some of its September gains. Meanwhile, Asian funds were flat, gaining 0.8 tons. ETFs in other regions lost -0.7 tons.

Overall, gold-backed ETFs have added about 182.2 tons of gold globally in 2017.  This represents healthy growth, but it pales in comparison to last year’s massive influx of 540 tons. This accounts in large part for last week’s headlines declaring gold demand is at an 8-year low. Demand is not nearly as soft as the year-to-year drop implies. This year’s numbers simply suffer from comparison.

Inflows of gold into ETFs over the last two years reverse a 3-year trend of outflows between 2013 and 2015.

Global gold-backed ETFs collectively held 2,347.6 tons of gold at the end of October. Funds added 182.2 tons of the yellow metal year-to-date, equivalent to $7.8 billion. This represents an increase of 8% of global AUM from December 2016.

Sluggishness in the North American gold-backed ETF market last month mirrors a similar phenomenon we’ve seen in physical gold demand. While investors in countries like China and India are buying gold, US demand for physical gold remains depressed. Peter Schiff talked about sagging US investment in gold last summer during an interview at International Metal Writers Conference. He said American investors are way too optimistic that Pres. Trump and the GOP will fix the US economy.

You have the opposite of a bubble in gold. Certainly, if you look at the United States, Americans are buying less gold now than they’ve done since the bull market began in 1999 – 2000.  Sales from the US Mint have collapsed. At SchiffGold, we just had our weakest quarter since the company has been in existence. And it’s not just my firm. It’s industry-wide. Americans are not buying gold, even though gold prices year-to-date are up more than the S&P 500. But the people who typically buy gold in America voted for Trump, and they’re no longer worried about the economy. So they’re not buying gold. They’re buying stocks instead, and I think they’re making a big mistake. They should be selling their stocks and buying even more gold.”

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

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.

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Gold Hits New All-Time Record High

Gold hit a new all-time nominal high, surpassing the previous record set in December of the previous year. The precious metal’s price reached approximately $2,140, indicating a robust and continuing interest in gold as a safe-haven asset, despite a rather peculiar lack of fanfare from the media and retail investors. This latest peak in gold […]

READ MORE →

Is a Weak Yen Feeding the Global Gold Bull?

The gold price has been surging, with unprecedented central bank demand gobbling up supply. It has been a force to behold — especially as US monetary policy has been relatively tight since 2022, and 10-year Treasury yields have rocketed up, which generally puts firm downward pressure on gold against USD. 

READ MORE →

World Gold Council: “Blistering Central Bank Buying” Fuels Strong Gold Demand

Total gold demand hit an all-time high in 2023, according to a recent report released by the World Gold Council. Last week, the World Gold Council (WGC) released its Gold Demand Trends report, which tracks developments in the demand for and use of gold around the world. Excluding over-the-counter (OTC) trade, 2023 gold demand fell slightly from 2022 […]

READ MORE →

VIX – The Calm Before the Storm

The VIX, often referred to as ‘Wall Street’s fear gauge,‘ is currently portraying a sense of calm among investors, registering well below the 20 level. 

READ MORE →

Four States Consider Lifting Taxes on Precious Metals

Citizens of Georgia, Kentucky, Wisconsin, and Kansas may soon enjoy lower taxes on precious metals if recently introduced pro-metal bills are made law in 2024.

READ MORE →

Comments are closed.

Call Now