Gold-Backed ETFs Posted $1.3 Billion in Outflows

The outflows were primarily triggered by stronger dollar, all-time high U.S. equity markets and Brexit extension.

SEATTLE (Scrap Monster): The latest monthly ETF report published by the World Gold Council (WGC) indicates broad-based outflows from gold-backed exchange traded funds (ETFs) during the month of November this year. The net outflows across various regions totalled $1.3 billion during the month.

The outflows were primarily triggered by stronger dollar, all-time high U.S. equity markets and Brexit extension. Incidentally, the U.S. dollar and equities witnessed their strongest month since June this year. The investor sentiments were impacted by pushing of the deadline for UK to leave the European Union to 2020. Also, fall in gold prices during the month created scepticism, which also contributed to the outflows.

According to WGC, the highest outflows were reported by the North American funds, which posted an outflow of $731 million. The Europe funds recorded outflow of $871 million, mainly driven by UK-based funds. The outflows from Asian funds totalled $119 million, with China turning out to be the main contributor.

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However, the gold-backed assets under management (AUM) are still higher by 35% so far this year, in comparison with the previous year, mainly due to strong inflows recorded during the five-month period from June to October this year. Nearly 385 tonnes have been added year-to-date, WGC report noted.

The WGC remained optimistic that global ETF demand will continue to exhibit strong trend through 2020.

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