According to the latest data released by the World Gold Council (WGC), global gold ETF (exchange-traded fund) holdings rose by 5% to 2,733 tons a month in August, only 2% below the historical peak at the end of 2012, when the gold price was about 9% higher than the current level.
Over the past three months, the size of global gold ETF positions has increased by 13%, mainly due to the slight inversion of the two-year/10-year Treasury bond yield curve caused by the decline in global interest rates and the continued geopolitical tensions between the United States and China. Historically, U.S. Treasury bond yields hang upside down in anticipation of a recession in the economy.
The dollar-denominated gold price rose further by 7% in August, bringing the global gold ETF's asset management scale up by 12% to $134 billion.
According to the World Gold Association report, North America continues to dominate global gold ETF inflows in August, with gold ETF positions in the region rising by 78 tons (total value increased by $3.8 billion, asset management scale increased by 5.5%) and surpassing Europe as the largest inflow area in 2019. The inflow growth was mainly driven by SPDR < Gold Shares and iShares Gold Trust; the scale of low-cost gold ETF continued to increase, with a cumulative increase of 2.3 tons in August, reaching a record 58 tons, totalling $2.8 billion.
During the period, European regional funds attracted 33 tons of net inflows (+1.7 billion US dollars, +2.8%) mainly from the UK, due to the continued weakening of the pound and the increased possibility of a "hard exit" from Europe. German government bonds with negative nominal 30-year yields were auctioned for the first time in a month to improve the opportunity cost of holding gold, as the price of gold in euros reached an all-time high.
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