ETF Gold Holdings advance 69 tons to 2,440 tons in 2018


NEW YORK (Scrap Register): Gold holdings of global exchange-traded funds and similar products rose 3% in 2018, finishing the year strong with the third straight month of net inflows in December, according to the World Gold Council (WGC).

Holdings rose by 69 tons to 2,440 tons in 2018, which equated to $3.4 billion inflows. The main drivers were the European funds and strong inflow activity in December.

This is the first time since 2012 that the value of total gold-backed ETF holdings has finished the year above US$100bn,” the WGC said in a report.

The European-based funds rose by 96.8 tons, up 10% on a year, with Germany leading the way in inflows with additional $2.6 billion. Also, the UK-based funds made a big contribution by adding $1.7 billion in inflows, triggered by uncertainty surrounding Brexit.

The month of December marked a strong end to the year, with global gold-backed ETFs advancing 3% or 76 tons ($3.1 billion). On a quarterly basis, Q4 saw an increase of 5%, led by inflows in North American and Europe.

“On an absolute basis, North American funds – which tend to be more price and momentum driven – led outflows, driven by the weak performance of gold during the third quarter. These flows reversed in the fourth quarter to make up most of the previous losses,” the WGC said.

Annually, North American funds saw outflows of 13.4 tons.

ETFs trade like a stock but track the price of the commodity, with the metals put into storage to back the shares. This gives investors exposure to gold prices without undertaking certain expenses such as storage and assaying of physical metal.

The best individual performer was Germany’s Xtrackers Physical Gold, which led annual global inflows by adding 46 tons ($1.9 billion) and growing 295% on the year, the WGC added.

On the other hand, the world’s largest gold ETF, SPDR Gold Shares, led global outflows by losing 49.8 tons ($1.8 billion) on a year.

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