After four consecutive months of inflows, holdings in global gold-backed exchange-traded funds (ETFs) and similar products fell by 33 t in February to 2 479 t, which is equivalent to about $1.3-billion in outflows.

Global assets under management (AUM) fell by 2% to $105-billion over the course of the month.

However, global gold-backed ETF flows remained positive year-on-year on the back of strong inflows in January, the World Gold Council (WGC) said on Thursday.

According to the WGC, the primary driver of global outflows was North American funds, as momentum investors took profits using these, the most liquid of US-based funds. However, the council said it continued to see inflows into low-cost ETFs, which it believes is linked to strategic allocations.

Funds in Asia also experienced outflows of 5%, while European and other regions were flat.

The council said it continued to see inflows into UK-based funds, which was likely driven by Brexit. The 506 t of current UK holdings is an all-time high.

Net outflows in gold-backed ETFs occurred as global stock markets continued their upward trend, moving up 2% on the month. According to the council, they now stand at 8% higher over the first two months of the year, their strongest start in three decades.

However, market uncertainty remains a concern. Some of the concerns include US–China trade relations, uncertainty around Brexit, a global economic slowdown and lofty stock market valuations.

Additionally, the US Federal Reserve has signalled a wait and see approach, which may influence the rate at which other central banks tighten monetary policy, the WGC said, adding that both monetary policy and the direction of the dollar would be key drivers for gold this year and may support gold investment.

Meanwhile, also in February, gold trading volumes decreased 5% below the 2018 averages to $104-billion a day. Although sentiment and positioning in COMEX futures increased from their lows, as the price of gold moved higher during the first half of the month, they remain below net longs.

The council highlighted that ETF holdings have grown 2% so far in 2019, and that outflows in February halted the upward trend that began in the third quarter of 2018. However, the council noted that flows remain positive for 2019 with collective inflows of 39 t.

Total holdings in tonnes remain near levels last seen in early 2013, at about 2 479 t, when the price of gold was 23% higher.

Low-cost ETFs added 20 t in the past seven months, representing growth of about 67%.