Investing.com — Global physically backed exchange-traded funds (ETFs) recorded their fourth consecutive month of inflows in August, driven primarily by increased holdings in funds listed in North America and Europe, the World Gold Council (WGC) said on Thursday, as reported by Reuters.
Gold ETFs, which hold physical bullion for investors, play a vital role in the investment demand for gold. The precious metal hit a record high of $2,531.60 per ounce on August 20, fueled by expectations of upcoming U.S. interest rate cuts.
Despite this recent positive trend, gold ETFs had seen outflows for three straight years due to high global interest rates. The recent four-month streak of inflows has only partially offset the year-to-date losses, resulting in a net outflow of 44 metric tons, the report said.
In August, gold ETFs added 28.5 tons, equivalent to $2.1 billion, bringing their total holdings to 3,182 tons, as per the WGC. The rise in gold prices and the recent inflows pushed total assets under management to $257.3 billion in August.
The report also added that the global gold trading volumes fell by 3.2% in August compared to the previous month, with daily trading volumes averaging $241 billion due to lower exchange-traded activity on COMEX.
However, activity in the more opaque over-the-counter (OTC) market increased by 5.9%, averaging $158 billion.
With gold prices up 21% so far in 2024 and growing expectations of U.S. interest rate cuts, speculators on COMEX increased their net long positions by 17% in August, reaching 917 tons—the highest level since February 2020, the report said.