Gold ETFs Endure Outflows In November But Withdrawals Slow

Gold-backed exchange-traded funds (ETFs) experienced further outflows in November, although the pace of redemptions slowed sharply from the previous month. That’s according to fresh research from the World Gold Council (WGC).

Global ETFs endured net outflows of $920 million last month, while physical holdings dropped to 3,236 tonnes. This was down 9 tonnes from October levels.

However, assets under management (AUMs) rose 2% month on month to $212.2 billion as bullion prices burst back through the $2,000 per ounce marker.

The sentimental metal continued to rise at the start of December on hopes of Federal Reserve rate cuts in the spring, and as hostilities resumed between Israel and Hamas. On Monday the safe haven struck fresh record peaks around $2,148 per ounce.

North American ETFs Print Inflows

Fund outflows were far lower in November than the $2.1 billion (or 37 tonnes) recorded in October. That was thanks in large part to net inflows in North America-based ETFs.

The WGC noted that “geopolitical risk and investor positioning helped push gold higher in the month, contributing to the change in trend in the US.”

North American funds enjoyed net inflows of $659 million, or 10 tonnes, last month. This broke five straight months of redemptions and drove total holdings and AUMs to 1,631 tonnes and $107 billion respectively.

However, European funds witnessed withdrawals for the sixth successive month, the WGC said. Redemptions totalled $1.6 billion or 20 tonnes, pushing AUMs to $92.4 billion and physical holdings to 1,411 tonnes.

The organisation noted that “opportunity costs continued to weigh on European investors’ appetite for gold ETFs” as yields remained around 10-year peaks. It added that rising local currencies weighed on investors demand for the precious metal.

In Asia, net inflows of 0.6 tonnes pushed total holdings to around 135 tonnes. Meanwhile AUMs increased by £47m to £9.3 billion.

Europe Drives 2023’s Outflows

November’s net redemptions mean that global ETFs endured outflows of 235 tonnes in the first 11 months of 2023. Total holdings of 3,236 tonnes at the month’s end was down 17% from the all-time high of 3,916 tonnes recorded in October 2020.

AUMs meanwhile dropped by $13.7 billion between January and November due to heavy outflows in Europe. The WGC noted that withdrawals of $9.4 billion during the first 11 months of 2023 represented “the region’s second worst year-to-date performance in history.”