Global ETFs See Inflow Of Over $17 Billion In September; Nippon India Gold Ranks 10th Globally: WGC

Global gold exchange-traded funds saw record monthly inflows in September, led by inflows across all regions, with assets rising by 145.6 tonnes from a month ago to 3,837.7 tonnes, the World Gold Council said in a report on Tuesday.

The inflows resulted in the strongest quarter of $26 billion, it said.

Indian gold exchange-traded funds witnessed an inflow of 7.3 tonnes in September, due to favourable local currency dynamics and increased investment demand as investors look for safe havens amid weaker domestic equities and persistent geopolitical and trade risk. The total assets under management in the country rose to 77.3 tonnes in September.

In India, Nippon India ETF Gold BeES saw an inflow of 2.2 tonnes, or $268.6 million, in September. The fund ranked 10th globally in terms of fund inflows.

"The surging gold price and hefty inflows brought global gold ETFs' total asset under management to another record high," the WGC said. In the September quarter, the global gold ETFs’ total AUM reached $472 billion, or up 23% on quarter, reaching another record high.

The holdings surged 6% on quarter to 3,838 tonnes, just 2% shy of the peak of 3,929 tonnes, recorded in the first week of November 2020. North American investors led the charge for most of the quarter at $16.1 billion, or 138.9 tonnes, the inflow representing the largest July-September quarter and second largest quarter on record.

In September alone, the North American region added 89.4 tonnes, or $10.6 billion, driven by ongoing trade, policy, and geopolitical risks that continue to persist with no clear signs of abatement. Further weakness in the dollar and the US Federal Reserve rate cut of 25 basis points, and expectation of another one or two cuts by year-end, also aided gold prices, it said.

In September, European gold ETF funds registered inflows for the fifth consecutive month with inflows of $4.4 billion or 37.3 tonnes, led by strong demand in the UK, Switzerland, and Germany. "Flows reflected both protection and momentum as investors sought a purchasing-power hedge and leaned into the breakout," the report said.

Asian gold ETF funds saw inflows of 17.5 tonnes or $2.12 billion in September, as flows turned positive for the quarter. China and Japan drove a large bulk of the region’s inflows, driven by strong gold price performance in local currencies, the WGC said.

Gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 35.2 tonnes to 1,012.6 tonnes in September. The second-largest gold-backed exchange-traded fund, iShares Gold Trust, saw an inflow of 24.7 tonnes, with holdings at 481 tonnes.

The daily average trading volume across all gold markets rose 34% on month to $388 billion in September. The jump in volumes occurred across all trading segments as gold prices moved higher; in fact, the gold price set 13 new all-time highs during the month.

Total net long positions on the Comex rose 23% on month to 806 tonnes as of September-end, with net long positions of money managers jumped 7% to 493 tonnes. Trading volumes on over-the-counter markets rose 12% on month to $191 billion a day.

At 7:50 p.m., the December contract of gold on the Comex was at $3,999.10 per ounce, up 0.6% from Monday's close.