Photo by: Bloomberg
Global gold-backed exchange-traded fund (ETF) holdings added 15 t to 2 484 t in May, the World Gold Council (WGC) reported on Wednesday.
Europe and Asia drove inflows, with European funds having responded strongly in the past two months.
North American fund flows reversed their early 2018 trend as they lost 2.3% of assets, likely a result of the volatile prices in the gold market, which left gold lower by 60 basis points (in dollar terms) in the month.
Volatility and weakness in the gold market were largely driven by a stronger dollar; however, US dollar-hedged gold was higher by 1.4% on the month.
This highlights the WGC’s view that having some allocation to US dollar-hedged gold helps risk-adjusted returns by lowering price volatility in periods when currency prices fluctuate.
Meanwhile, the WGC reported that North American funds lost 30 t ($1.2-billion), while European funds saw solid net inflows of 26 t ($1.2-billion) in May. Total fund holdings in Asia rose by 21 t ($862-million), while funds in other regions lost 2 t, or 6% of assets.