Gold ETFs Reported Significant Outflows in Q3
The European-listed ETFs recorded modest outflow of 14t in Q3 this year.
SEATTLE (Scrap Monster): The Gold Demand Trends Q3 2018 Report published by the World Gold Council (WGC) suggests significant outflows from gold-backed ETFs during the third quarter of 2018. This was the first quarter to witness outflows since Q4 2016. The outflows totaled 103.2t in Q3 ’18. It must be noted that ETFs had recorded net inflows of 13.2t in the corresponding quarter in 2017.
The North American region accounted for 73% of the total drop in global gold-backed ETFs. The region also accounted for nearly 90% of the outflows so far this year. The overall decline is mainly on account of the positive growth to the U.S. economy, rising strength in U.S. dollar and record-high equity markets. This clearly indicates that there exist fewer concerns among U.S. investors with regards to several key issues including escalating trade war conditions.
The European-listed ETFs recorded modest outflow of 14t in Q3 this year. On the contrary, the funds saw addition of 37.7t during the initial nine-month period of the year. The year-to-date gains are mainly attributed to political uncertainty in certain countries of the region coupled with negative yields on sovereign debt and corporate bonds.
Among other regions, China-listed ETFs continued to remain volatile, reporting outflows of 12.2t in Q3 this year.
The unprecedented quarterly outflows from ETFs more than offset the sharp rise in bar and coin demand, thereby resulting in 21% year-on-year decline in investment demand in third quarter of 2018.