Gold-backed exchange-traded funds (ETFs) suffered their 11th straight month of declines, according to the World Gold Council (WGC).
This was due to further heavy liquidations in Europe, the organisation said.
Total holdings in bullion-backed ETFs slipped by 33 tonnes, the WGC said, to 3,080 tonnes. This was the lowest amount for more than four years.
Outflows last month were equivalent to $2 billion. However, a strengthening gold price meant that total assets under management (AUMs) rose to $229 billion.
Gold prices rose to fresh record peaks of $2,364 per ounce in April. Fears over the macroeconomic and geopolitical landscape drove interest in the safe-haven commodity.
Down in Europe
April’s outflows were driven by further liquidations in Europe, the world’s second-largest gold ETF marketplace.
European funds recorded outflows of 52 tonnes, which in turn pushed aggregate holdings to 1,279 tonnes. This was the eleventh successive monthly decrease.
Outflows totalled $4 billion, although AUMs rose to $95 billion.
Explaining last month’s outflows, the WGC said that “despite cooling inflation readings in the region, investors pared their expectations of early rate cuts from the Bank of England and the European Central Bank.”
Holdings Rise Elsewhere
However, inflows into North American and Asian gold ETFs helped offset fresh losses in Europe.
Funds in North America enjoyed a one-tonne inflow, which drove total holdings to 1,575 tonnes. Inflows were equivalent to $124 million, which helped AUMs improve to $117 billion.
This was the second month in a row of positive flows.
The WGC noted that “as in March, the strong gold price performance triggered in-the-money (ITM) call options of major gold ETFs, creating sizable inflows.”
It added that “spikes in geopolitical risks and financial market volatilities also sparked inflows into various North American gold ETFs.”
In Asia, gold-backed ETFs enjoyed inflows of 19 tonnes. This was equivalent to $1 billion.
Asian funds ended the month with 167 tonnes of metal. AUMs, meanwhile, ended the month at $13 billion.
The WGC said that “a sluggish equity market, expectations of a weaker local currency, increasing promotional efforts from ETF providers’ and strong price performance were the main drivers.”
The body added that “China was the main engine in the month, where gold ETFs witnessed not only record monthly inflows… but also reached their highest AUM ever.”
