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

Holdings in Gold-Backed ETFs Grew 14% in 2019, Hit All-Time Highs

  by    0   1

Net inflows of gold into gold-backed ETFs came in at 400.3 tons in 2019, according to data released by the World Gold Council. ETF gold holdings grew by 14% last year and finished at 2881.2 tons.

Overall, global gold-backed assets under management grew by 37% in US dollars due to positive demand and an 18% increase in the price of gold.

ETF gold-holdings reached a record 2,900 tons in the fourth quarter. The previous record for ETF gold holdings was set back in 2012 when the price of gold was near $1,700 per ounce.

North American funds led regional inflows with an addition of 206 tons. That represented a 14.4% increase year-on-year. The WGC cited growing geopolitical tensions and the first Federal Reserve rate cuts in a decade as reasons for the rush to gold.

European funds experienced inflows of 188 tons, a 13.6% y-o-y increase. England-based ETFs led the way due to uncertainty over Brexit and the resulting political chaos. German fund also saw a healthy 13% increase in gold holdings, primarily driven by negative yields.

Asian funds finished the year relatively flat, with 0.1-ton outflows.

Funds in other regions grew by 16.3%. adding 6.3 tons of the yellow metal. Most of this growth came from Australia-listed funds.

In 2019, the price of gold hit all-time highs in every major G10 currency apart from the US dollar and Swiss franc. Global trading volumes rose 27% y-o-y to $145 billion per day in 2019. That was up from $114 billion per day in 2018. According to the WGC:

The strength of gold was mainly the by-product of a dovish shift in monetary policy. Our research indicates that a shift from a hawkish or neutral stance to a dovish one has historically led gold to outperform. Additionally, investors may have been drawn to our research that shows the positive impact of lower rates on gold prices as well as the potential for additional gold exposure (potentially replacing bonds) in a low-rate environment. And with over 90% of sovereign debt trading with negative real rates, the opportunity cost of investing in gold improved.”

The World Gold Council report said the primary drivers for gold will likely remain in place in 2020, including Federal Reserve intervention in the repo markets and what is in effect quantitative easing, continued trade tensions between the US and China, and surprisingly low yields in speculative corporate debt.

Inflows of gold into ETFs are significant in their effect on the world gold market, pushing overall demand higher. Gold demand was up 3% in the third quarter of 2019. The World Gold Council listed inflows of metal into g0ld-backed funds as one of the factors driving 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.

Download SchiffGold's Gold vs GLD EFT's Guide Today

Get Peter Schiff’s key gold headlines in your inbox every 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

US National Debt Quietly Eclipses $28 Trillion

On March 1, the US national debt eclipsed $28 trillion with no end to the borrowing and spending in sight. It was just last fall that the debt surged above $27 trillion for the first time. In less than five months, Uncle Sam added another $1 trillion to its debt load. And there’s barely been […]

READ MORE →

Go Big on Silver With 1,000-Ounce Bars

Silver enjoyed a moment in the sun when the Reddit investors turned their attention to the white metal. Silver has since faded from the headlines but it remains an attractive investment option. As one portfolio manager put it, sub-30-dollar silver “is the most attractive macro-economic asset in the world.” For investors who want to go […]

READ MORE →

The Danger Lurking Behind Government Digital Currency

China made a big splash when it rolled out its digital yuan and it got a boost when China’s biggest online retailer announced it has developed the first virtual platform to accept the Chinese digital currency. But China isn’t alone in exploring the possibility of digital money. Sweden has developed a digital currency of its own […]

READ MORE →

Government Policy Changes Should Boost Indian Gold Market

Some policy shifts recently announced by the Indian government in its Union Budget will likely have a positive impact on the country’s gold market. India ranks as the second-largest gold-consuming country in the world, second only behind China. The three key policy changes that will likely affect the gold market are:

READ MORE →

Fed Expands Record Holdings of US Debt

The Federal Reserve expanded its record holdings of US Treasuries in the fourth quarter of 2020 as it continued monetizing the massive federal debt. The Federal Reserve added another $253 billion to its Treasury holdings in Q4 according to the Fed’s Treasury International Capital data released on Feb. 16. That brought the central bank’s US […]

READ MORE →

Comments are closed.

Call Now