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Investors look to gold-backed ETFs as uncertainty rises

July was a solid month for gold-backed ETFs as gold prices surged, according to the World Gold Council.

The gold price increased by 1.3% in July in US dollar terms and global assets under management rose 3.4% to US$119bn (€106bn).

Gold-backed ETFs added 52 tonnes (2% of AUM), increasing their collective gold holdings to 2,600 tonnes in July – a level not seen since March 2013, according World Gold Council data.

Gold-backed ETFs have seen robust flows since mid-May on the back of rising uncertainty – whether from economic concerns, trade tensions or geopolitical risks – and global monetary policy started to shift to a more accommodative stance.

US dominates flows

North America dominated July’s flows, adding 43 tonnes (US$2.0bn, 3.4% of AUM) to the region’s collective holdings, led by SPDR Gold Shares and iShares Gold Trust, which together accounted for 75% of net global inflows

European-listed funds brought in 7.5 tonnes (US$483mn, 0.9%), with net inflows spread across countries in the region, although this was less than in June, amid looming concerns over Brexit, weaker currencies and negative interest rates.

Flows were mixed in Europe: three of the top 10 global funds were from the UK – including iShares Physical Gold, which added 5t (US$233mn, 4.2%) during the month – but two of the bottom 10 were also from the UK, including Invesco Physical Gold, which lost 4.3t (US$193mn, 3%); funds listed in Germany mostly saw small but positive inflows

European funds have grown consistently this year, seeing positive flows in all months except April and UK-based fund holdings are at all-time highs, reaching 556 tonnes or 21% of global gold-backed ETF assets in July.

Top performing gold-backed ETFs in July

Worst performing gold-backed ETFs in July

Source: World Gold Council


David Robinson

David Robinson is the editor of Expert Investor. He has 18 years’ experience as a business journalist and editor. In the past he has written for the Guardian newspaper and The Telegraph, and worked as...

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