Gold ETFs post $18 billion inflow, second-largest month ever

August saw $18 billion flow into global gold ETFs, marking the second-biggest monthly intake ever and pushing total holdings to a record 4,189 tonnes.

The World Gold Council released the data this week. Assets under management climbed 16% from July to $615 billion, aided by the rising gold price.

Western Investors Drive Gold ETF Buying Spree

European funds were the main source, with $7.9 billion in purchases, their best month ever, per Council data. The UK contributed $4.4 billion, its second-highest monthly figure. France saw a national record of $1.5 billion.

North American funds took in $7.7 billion, their third-biggest monthly amount. Buying was quiet initially but picked up in the week of August 17, with funds taking in about $4 billion over five days. That occurred around the same time as the Treasury's expanded debt buyback.

That surge was significant for the year-to-date totals. It erased the region's March outflow record of $13 billion and brought North American flows to positive for the year.

Asian funds contributed $2 billion, their strongest showing since February. China once again led Asia, as stable local prices attracted investors. The People's Bank of China has continued its purchasing run.

Global ETF flows had already shifted upward in July. So far this year, inflows stand at $29 billion, equating to 160 tonnes.

The World Gold Council attributed the inflow spike to three probable factors: US action to support the yen on July 31, the Treasury's buyback on August 19, and gold's price momentum after breaking through key technical levels.

Traders Rush Back into Gold

Gold market activity recovered broadly. Daily average trading volume jumped 21% from July to $430 billion, with increases across all major segments.

Gold ETF trading volumes surged 83% to $8.7 billion daily. Funds listed in North America were responsible for over 73% of that volume.

Positioning also shifted. COMEX net longs increased 39% (212 tonnes) to 753 tonnes. Managed money raised its net long position by 96 tonnes to 470 tonnes.

September figures will indicate if Western buyers maintain August's buying intensity.