March saw another month of declines in holdings of gold-backed ETFs, according to the World Gold Council (WGC). However, global outflows narrowed from previous months, with strength seen in North America and Asia. Total global ETF holdings fell by 14 tonnes in March to reach 3,112 tonnes, the lowest cumulative total in over four years. Despite this decline, last month’s outflow was lower than in February. Total assets under management (AUM) reached 21-month peaks of $222 billion, thanks to an 8% rise in gold prices to record highs.
Gold prices continued to climb in March, reaching a new high of $2,363.50 per ounce. In North America, investor interest in gold increased, leading to inflows of $360 million in ETFs. This, coupled with the rise in gold prices, pushed AUMs in the region to $112 billion. The total physical inflows in North America were around 5 tonnes, bringing total holdings to 1,574 tonnes. The rise in gold prices triggered activities in the options market, driving further inflows as investors viewed the US Federal Reserve’s comments as dovish.
In Asia, gold ETFs recorded their 11th consecutive month of inflows, with total holdings reaching 148 tonnes and AUMs at $11 billion. China led the inflows as the local gold price rally attracted investors, while Japan also saw positive flows. Meanwhile, European funds continued to experience outflows, with ETFs witnessing negative flows of 22 tonnes, bringing holdings to a 51-month low of 1,331 tonnes. Despite the outflows, AUMs in Europe rose to $95 billion due to the rising gold price.
The UK accounted for the majority of the outflows in Europe, despite the Bank of England’s dovish stance in its March meeting. The WGC noted that scattered inflows were seen when gold prices surged, but outflows occurred when gold’s momentum paused, likely due to profit-taking activities. Demand for safe-haven gold declined as major central banks moved towards or began cutting interest rates, leading investors to favor riskier assets. Overall, global ETF holdings of gold fell in March, but the decline was less severe compared to previous months, with North America and Asia showing strength in inflows.
