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Global gold-backed exchange-traded funds marked their largest annual inflow of the precious metal on record, just five months into the calendar year, according to a report from the World Gold Council released Thursday.
Year to date as of May, gold-backed ETFs saw inflows of 623 metric tons, valued at $33.7 billion, topping the previous annual record of 591 metric tons in 2009, according to WGC data. For the month of May, the ETFs added 154 metric tons, valued at $8.5 billion. That was up 4.3% from a month earlier, boosting global gold ETF holdings to a new all-time high of 3,510 metric tons.
The WGC said in a report that “positive flows combined with a rising gold price also pushed assets under management (AUM) in gold ETFs to new record highs of US$195 [billion], even as stock and bond prices increased.”
Gold futures prices, based on the most-active contracts, posted a gain of 3.4% in May. August gold GCQ20, +1.09% was trading $13.60, or 0.8%, higher at $1,718.10 in Wednesday dealings.
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“Gold ETFs saw inflows on all but two trading days over the past two months, underscoring that investors are embracing gold in both risk-on and risk-off environments,” said Adam Perlaky, manager of investment research at the World Gold Council, in emailed commentary.
The WGC also reported that gold trading volumes picked up in May, climbing to $164 billion during the month from $140 billion, even as other asset class volumes saw sharp declines.
“As investors seek efficient and effective strategies to hedge ballooning budget deficits and high valuations for both stocks and bonds, collective holdings of gold ETFs exceed the official gold reserves of every country except for the U.S.,” Perlaky said. “Ongoing economic and employment uncertainty around COVID-19, trade tensions and continued central bank asset purchasing, are driving gold prices and gold ETF inflows globally even as markets begin to steady.”
On Thursday, the European Central Bank boosted the size of its Pandemic Emergency Purchase Program. It said the envelope for asset purchases was increased by 600 billion euros ($674.5 billion), to 1.35 trillion euros.
