Gold ETF inflows printed at their highest since May last year

New York (Feb 8)  latest World Gold Council Report noted that gold-backed ETFs were the highest in terms of tonnage since May last year, with institutional and individual investors using them to implement many of their investment strategies. Flows in ETFs often highlight short-term and long-term opinions and desires to hold gold.

Global gold-backed ETFs saw net inflows of 46.3t in January, the highest level since May, amid broader stock market volatility which spurred safe-haven buying, according to the World Gold Council.

In terms of the regional spread, North American ETFs led the way, registering inflows of 49.0t, driven by major U.S. funds and despite the Fed signaling an acceleration in monetary policy tightening. Meanwhile, European ETFs saw net inflows of 6.7t, while Asian ETFs observed net outflows of 9.9t during the month, with investors opting to reduce holdings ahead of the Chinese New Year and as Beijing bucked the trend by loosening monetary and fiscal policy.

In recent sessions, gold has moved back into a sideways trajectory. What is good is the fact that the price held up very well after the bumper non-farm payroll report last Friday. Over the last two trading days, the price has managed to move back above the psychological magnetic $1800/oz area. Since the all-time high was printed back inAugust 2020 most contracts have been traded at $1781/oz so any hold above that zone is a positive sign. The ETF inflow is a good sign and as inflation in real terms is still high there could be more to come. However, Fed watchers are on the lookout to see how aggressive the central bank might be.

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