Gold's Global Divide: Why US, Asian ETF Investors Are Buying While Europe Bails

Core Insights - Global gold ETFs are nearing record holdings again, with U.S. and Asian investors increasing their positions while European investors are cashing out [1][5]. Group 1: Global ETF Holdings - Total worldwide ETF holdings increased by 55 tonnes in October, marking five consecutive months of inflows, bringing total assets to 3,893 tonnes, just shy of the record high set in 2020 [2]. - Gold prices have risen over 50% year-to-date, briefly reaching $4,380 per ounce before stabilizing around $4,000 [2]. Group 2: North American Investment Trends - North American investors were the largest buyers, adding 47 tonnes worth approximately $6.5 billion in October [3]. - Major ETFs like SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) experienced consistent inflows despite mid-month volatility, indicating strong investor confidence [3][4]. - Lower-cost alternatives such as SPDR Gold MiniShares (GLDM) gained popularity as investors sought to hedge their portfolios amid declining yields and equity market concerns [3]. Group 3: European Market Dynamics - Europe experienced its second-largest monthly outflow on record, with holdings decreasing by 37 tonnes, equivalent to $4.5 billion [5]. - The largest withdrawals were from U.K. and Germany-listed products, as investors took profits following gold's significant rally [5]. - Switzerland saw inflows, but they were insufficient to counterbalance the major outflows from the U.K. and Germany, attributed to a stronger euro and easing inflation [5]. Group 4: Asian Market Activity - Asian investors showed strong demand for gold ETFs, purchasing 45 tonnes valued at approximately $6.1 billion, primarily driven by Chinese funds [6]. - Chinese gold ETFs, such as ChinaAMC Gold ETF and Bosera Gold ETF, have appreciated over 47% year-to-date, reflecting a shift towards gold as a hedge against market uncertainty amid U.S.-China tensions and a weakening yuan [6].