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 US 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 US dollars being down 5.8% over the same period.
Flows into North American gold-backed ETFs were positive, led by inflows in US-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.