Canadian Mining Journal


GOLD: October inflows to gold-backed ETFs up as investors hedged risk -WGC

NEW YORK – Gold-backed exchange-traded funds (ETFs) registered increased inflows to both North American and European funds during October, as tumultuous equity markets triggered flight-to-quality buying, the World Gold Council said on Tuesday.

North American funds had inflows of $561 million while European funds posted inflows of $678 million last month, according to figures provided by the Council. It was the first monthly inflow in four months for global gold-backed ETFs, as the price of gold rose 2.3%.

Global stock markets had their worst October since the 2008 financial crisis, with the MSCI ll-World Index down more than 7.4% for the month. Gold benefited from flight-to-safety investment flows, as did U.S. dollar hedged gold in the stronger dollar risk-off environment, rallying 4.3% on the month.

The Solactive GLD Long USD Index is now effectively flat on the year, despite gold in U.S. dollars being down 5.8% over the same period.

Flows into North American gold backed ETFs were positive, led by inflows in U.S. listed funds and counterbalanced by softer outflows in Canadian funds. Europe also had inflows, driven primarily by U.K. listed funds, with nearly half the European inflows coming from currency hedged funds. Chinese listed funds had extreme flows across funds, resulting in outflows equivalent to 8% of assets.

It was the second straight month of significant outflows, driven in part by profit taking from some investors as the price of gold in yuan rose by as much as 5% in October.

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