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

Gold Flowed Out of North American ETFs Last Month; Global Holdings Up on the Year

  by    0   0

European gold-back ETFs continued to add yellow metal in June, but globally, total holdings fell for the first time in nearly a year as gold flowed out of North American and Asian funds.

Global gold-backed ETF holdings fell by 49.3 tons to 2,434 tons in June, according to the latest data released by the World Gold Council. It was the first month of net outflows since July 2017.

Even with the sharp June drop, total ETF gold holdings globally remain up on the year by 63 tons.

North American funds accounted for virtually all of the June drop, as they shed 44.4 tons of gold last month. This follows a 30-ton outflow in May.

Meanwhile, European funds added a small amount of gold last month, with inflows totaling 0.5 tons. Funds listed in Asia saw outflows of 3.5 tons.

The outflow of gold from ETFs isn’t surprising in light of the steep decline in the price of the yellow metal last month. According to the World Gold Council, outflows in North America were driven by “US dollar strength and a declining gold price.”

 Investors seemed to shrug off poor equity market performance and escalating global trade tensions, pushing the gold price down by 4.2% in June.”

On the year, gold holdings in North American funds have gone slightly negative after impressive inflows during the first quarter. European and Asian funds have made up the difference. European funds have added $2.5 in gold (5.9% AUM) to their holdings. Asian funds have seen an impressive percentage increase, growing by 15% y-t-d.

Overall globally, funds have recorded net inflows of gold in 2018. The movement of the yellow metal into ETFs over the last two years and continuing into 2018 reverses a 3-year trend of outflows between 2013 and 2015.

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 latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
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

Bill Introduced in Congress to Eliminate Capital Gain Taxes on the Sale of Gold and Silver Bullion

A bill introduced in the US House would eliminate capital gains taxes on gold and silver bullion. Rep. Alex Mooney (R-W.Va.) introduced HR6790 on Sept. 12. Titled the Monetary Metals Tax Neutrality Act of 2018, the legislation would amend the IRS code to exempt the sale of “refined gold or silver bullion, coins, bars, rounds, or […]

READ MORE →

Debt Is a Powder Keg and Rising Interest Rates Are Matches

If you look at past financial and economic crises, what is the common denominator? Debt. That’s why we talk so much about debt on these pages.  Related

READ MORE →

Bond Yields Climbing: Could the Chinese Weaponize US Debt?

Yields have been on the rise this week in the midst of a bond market sell-off. Two-year borrowing costs hit their highest level in a decade Wednesday. The yield on the 2-year Treasury climbed to 2.816%. Meanwhile, the 10-year Treasury yield hit a four-month high of 3.07%. What’s going on here? Related

READ MORE →

Peter Schiff Talks Trade War and Politics

The trade war between the US and China escalated again this week. The US slapped an additional $200 billion in tariffs on Chinese goods. The tax starts at 10% and will increase to 25% by the end of the year. China retaliated by announcing another $60 billion in tariffs on US goods. As Peter Schiff noted […]

READ MORE →

Jim Rickards: The Slow-Motion Meltdown

Sept. 15 marked the 10-year anniversary of the Lehman Brothers bankruptcy. Many investors undoubtedly remember that day clearly. But as Jim Rickards pointed out in a recent article at the Daily Reckoning, that day was actually the culmination of a long meltdown. Investors should have seen it coming. In fact, they could have seen it coming […]

READ MORE →

Comments are closed.

Call Now