After global gold ETFs recorded a record monthly outflow in March, the World Gold Council (WGC) has found flows turned positive in April as Western investors returned to the precious metal.
According to the WGC, global gold ETFs recorded US$6.6 billion in inflows, expanding total ETF holdings to 4,137 tonnes, the third-highest level on record. This pushed global ETF assets under management to US$615 billion, up 1 per cent month-on-month.
While March recorded US$12 billion in outflows driven almost entirely by North America (US$14 billion) and Europe (US$0.1 billion), Asia stood out with US$12 billion in inflows as investors bought the dip.
But that trend reversed in April, with all regions contributing to inflows into the precious metal. Europe led the gains (+US$3.7 billion), while Asia extended its inflow streak to eight months (+US$1.8 billion). North America also posted notable inflows (+US$1 billion).
“April saw strong inflows into global gold ETFs. Surprisingly, these were led by Europe, likely due to concerns from European investors that the region would be harder hit by the Strait of Hormuz closure. Asia and the US contributed about a third as much as Europe during the month,” the latest market commentary stated.
Australian gold ETF flows also returned to positive territory (+0.6 tonnes) after mild outflows (-0.4 tonnes) in March, lifting total AUM to US$8.1 billion (up US$65 million).
While inflows returned, the council noted they were uneven through the month, with North America seeing most activity in the first half before easing in the second half as the Iran war showed signs of further escalation and opportunity costs rose.
Europe’s inflows also appeared tied to heightened geopolitical and geoeconomic risk, with the UK leading the charge, while Switzerland and Germany also “contributed meaningfully”.
For Australia, the WGC described flows in the country as “steady, marginal buying” throughout the month, in contrast to the choppier trading seen elsewhere.
The inflows came against a largely flat and subdued gold price, with the precious metal ending April broadly unchanged at US$4,611/oz.
The council said that price was weighed down by a return in risk appetite, as markets appear to be treating the war and ongoing Strait of Hormuz shutdown as “transitory”. However, it added that a weaker US dollar and European ETF inflows provided some support.
Looking forward, it argued short-term headwinds could sustain some gold weakness as it searches for a catalyst to regain the structural uptrend, with gold in a “technically vulnerable” position.
“Technical momentum looks more vulnerable, rate-cut expectations have moved out the curve and US-led risk appetite has recovered.
“But the crisis has also reinforced many of the structural reasons investors own gold in the first place: inflation uncertainty, geopolitical risk, unreliable bond diversification, fiscal pressure and gradual reserve diversification. A catalyst – exogenous or perhaps via a weaker price – will be needed to re-establish the structurally supported uptrend.”
It added that central bank demand for gold remains structurally solid, but the war has reminded investors that gold can be mobilised for liquidity in times of stress. Moreover, concerns about further official-sector sales or swaps could remain a headwind while the Hormuz disruption continues.
