Where is the money from gold ETFs going?
The World Gold Council (WGC) has published data on the dynamics of ETF-funds. For the third time in a row for the year there was a significant net outflow of gold from the reserves of these funds.
The outflow amounted to 244 tons and thus compared to the 2021 (minus 189 tons) and 2022 (minus 110 tons) years. The last time even larger sell-offs were recorded was in 2013, when global gold holdings in ETFs fell by 929 tons.
Last year, the ETF sector saw two opposite trends. While the first five months of 2023 saw modest inflows, June through December saw massive selling interest. Monthly outflows fluctuated between 9 tons (November) and 59 tons (September).
An interesting fact is that while there are huge geopolitical risks in Europe due to military action in Ukraine and threats to various NATO countries, there seems to be less concern in Europe than in North America. Gold outflows from European ETFs will total 180 tons in 2023 and are more than double the outflows from North American ETFs (minus 82 tons)
Despite the high outflows, these two regions still have the highest gold holdings in ETFs worldwide. Of the 3,225.5 tons of gold held in ETFs at the end of 2023, North America accounts for 50.9% of the market, while Europe accounts for 43%. Asia and the rest of the world play a distinctly minor role in this market segment, with 4.3% and 1.8%, respectively.
That said, gold was at its all-time highs in 2023. Why? It's simple. The outflow from gold ETFs was offset by gold purchases by global central banks. It is they who are playing an increasing role in the pricing of the gold. Ordinary investors are losing patience. They see the constant growth of the U.S. stock market and individual cryptocurrencies. Against their background, gold has less bright growth dynamics.
When will this interest return? Of course, when gold rises sharply. And again there will be purchases at the highs. Who will be the seller? The very global central banks, which have been actively buying gold for the last few years.
Website : https://gold.storage/
Whitepaper: https://gold.storage/wp.pdf
Follow us on social media:
Telegram: https://t.me/digitalgoldcoin
Steemit: https://steemit.com/@digitalgoldcoin