According to the World Gold Council, holdings in global gold-backed ETFs and similar products rose in January by 72 tons(t) to 2,513t, equivalent to US$ 3.1 bn in inflows, marking the fourth consecutive month of net inflows.

The flow in and out of gold ETFs is an important indicator of market sentiment and price formation of gold. Since September 2018, the gold price has risen by roughly 15%. Interestingly, this price development takes place despite a relatively strong dollar, low inflation and a strong rebound in stock markets.

SOMETHING HAS CHANGED

Notably, total holdings have not been this high since March 2013, when the price of gold was 22% higher. Global gold-backed ETF holdings have grown 6% over the past two months, driven by market uncertainty and a shift in sentiment that drove the price of gold 3.5% higher in January alone. Global assets under management (AUM) rose by 6% in US dollars to US$107bn over that month.

Monthly flows of gold in tons, data as of January 31st, 2019