The World Gold Council released its October report showing that physically-backed gold ETFs recorded combined net inflows of US$2.7 billion in October, marking the fourth consecutive month of inflows.
European funds stood out with strong inflows. Asian investors maintained net buying, while North America saw a slight net outflow.
Global gold ETF total holdings rose by 19 tonnes to 4,275 tonnes, setting another month-end record. At the same time, falling gold prices offset the contribution from inflows, pushing assets under management (AUM) down 6% to US$542 billion. For the first ten months of the year, global gold ETFs accumulated net inflows of US$41 billion, the third-highest on record, with holdings increasing by 246 tonnes cumulatively. Europe and Asia were the main drivers of inflows, contributing 44% and 45% of total net inflows respectively. At the country level, the United Kingdom recorded the highest inflow.
Regional Overview
North America: A slight net outflow of US$512 million, making it the only region with outflows in October. The outflows came entirely from US-domiciled gold ETFs; Canadian gold ETFs continued to attract inflows. In October, US tech stocks were sold off amid concerns over AI capital expenditure. Under market volatility, some investors sold gold ETFs to obtain liquidity, causing the outflows from North America 鈥?this also highlights a core attribute of gold: ample liquidity, making it easy to liquidate during market turbulence to meet funding needs. The stock market decline simultaneously boosted safe-haven buying of US Treasuries, with Treasuries recording their best monthly return since December 2023 in October, as yields retreated from near 25-year highs. With the improved attractiveness of US Treasuries and the market scaling back expectations of aggressive Federal Reserve rate hikes, capital shifted toward Treasuries, diverting funds away from gold allocations. However, it is worth noting that when US stocks tumbled again in the final week of October, US gold ETFs returned to slight net inflows. This reflects investors' strategic allocation needs: with midterm elections approaching bringing political uncertainty and fiscal concerns persisting, gold is used to diversify portfolio risk.
Europe: The fourth consecutive month of net inflows, with US$1.8 billion flowing in during October. The UK led the way, while gold ETFs listed in Germany, Switzerland, and France also attracted buying. The region has now seen 18 consecutive weeks of net inflows. Even as gold prices weakened, regional yields rose, and market expectations for ECB policy fluctuated, the trend continued. This indicates that European gold ETF allocations are increasingly driven by long-term strategic demand, stemming from persistent political and fiscal uncertainty in the region: social unrest and political fragmentation in France, with fiscal consolidation pressures weighing on market confidence, raising sovereign risk premiums; high yields, energy shocks, and tightening fiscal space in the UK raising concerns; weakening economic momentum and political pressure on the coalition government in Germany. With traditional safe-haven bond markets showing their own contradictions, investors are turning to gold ETFs to diversify risk.
Asia: Net inflows of US$1.3 billion in October, also the fourth consecutive month of inflows. Japanese gold ETFs continued to see inflows: the Nikkei index pulled back, safe-haven buying pushed down JGB yields, and the market scaled back expectations of Bank of Japan tightening; the BOJ held rates steady at the end of October. Indian gold ETFs also attracted sustained buying, with only a brief disruption in mid-October when local fund-of-funds suspended new subscriptions to gold FOFs.
Other regions: Moderate net inflows of US$62 million, with buying in Australia and South Africa persisting throughout the month.
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