Net investments in physically-backed gold exchange-traded funds (ETFs) turned positive last week after three weeks of continuous outflows, data from the World Gold Council (WGC) showed.
Investments in the ETFs were $1.79 billion, while outflows were $1.18 billion, leaving a net inflow of $0.61 billion. Surprisingly, investors in Asia, particularly China, chose to quit the funds, but those in North America, led by the US, invested $0.83 billion.
Data for Indian investments were not available, but Japanese investors chose to log out to the tune of $0.2 million. US investments were $792.8 million, while in the UK, they were $43.4 million. France and Canada also saw the inflows turn positive at $73.2 million and $32.1 million. These countries were the movers and shakers of the gold ETF investments.
Equity markets crash
Investors chose to return to gold ETFs following a crash in the equities market. With gold prices dropping by 19 per cent since it peaked at $5,608 an ounce on January 29, the precious metal seemed an attractive asset to bet on. Gold prices are currently ruling at $4,570 an ounce.
Gold prices have dropped after the Iran war broke out on February 28. Fears of inflation, a slowdown in the economy, a hike in bank interest rates and a rise in bond yields have dragged gold from its peak.
Year-to-date, net inflows into the ETFs were $19.54 billion, up from 18.9 billion a week ago. Total investments were $70.81 billion ($69.02 billion a week ago), while outflows were $51.27 ($50.09 billion).
Net investments in the US were down at $925.2 million compared with $1.72 billion a week ago. In the UK, they increased to $2.04 billion and to $1.90 in Switzerland.
China, India lead
China and India continue to lead the investment flow into ETFs. Chinese inflows in Beijing were $8.83 billion ($9.23 billion a week ago), while Indian investments were down a tad at $3.55 billion. Inflows in Japan were up at $1.26 billion, while they were $0.89 billion in South Korea.
Among other nations, the Hong Kong Special Administrative Region had total inflows of $0.93 billion, Singapore $0.27 billion and Canada $0.46 billion.
Investments into gold ETFs surged early this year as the yellow metal soared. The precious metal has had a golden rally since 2024 on hopes of a rate cut by the US Fed, the US trade dispute with other countries and geopolitical crises. However, the Iran war changed the outlook.