Gold ETF Flows: December 2024

First positive December since 2019

Published:

Highlights

  • The 2024 inflows and a rocketing gold price pushed total assets under management (AUM) to a record high US$271bn while holdings were relatively unchanged.
  • December flows flipped back to positive at US$778mn, led by Asia and Europe, while North America saw mild losses.
  • Global gold trading volumes fell 24% in December, yet 2024 overall saw a sizable 39% increase.

2024 in review

In a year in which the gold price reached new all-time highs 40 times, global investor appetite for gold ETFs finally turned around, booking the first annual inflow in four years. A rocketing gold price, alongside a small but positive US$3.4bn net inflow across physically-backed global gold ETFs, pushed their total AUM to jump by 26% in 2024 to US$271bn. Collective holdings, however, fell slightly (-0.2%) in 2024.1

While Asia continued to lead inflows, Western investor appetite for gold improved with North American funds registering their first positive annual flow since 2020 and European outflows narrowing significantly compared to 2023.

A few key factors contributed to improved gold ETF flows in 2024, most notably:

  • Heightened uncertainties caused by the dramatic US election and flames of war on multiple fronts
  • Changing expectations of future rate paths as major central banks began their easing cycles
  • The strongest annual gold price performance since 2010.2

December in review

Flows of global physically backed gold ETFs3 flipped back to positive in December, adding US$778mn (Table 1).4 Asia and Europe led inflows, while North America saw modest outflows. It is worth noting that 2024 saw global gold ETFs’ first positive December since 2019, while collective holdings rose by 4t to 3,219t. However, total global gold ETF AUM fell by 1.4% to US$271bn due mainly to a 1.5% decline in the gold price.

Regional overview

The five-month inflow streak in North American funds came to an end in December, losing US$342mn. Despite the anticipated 25bps rate cut last month, the US Fed sent a hawkish signal as it updated projections to show fewer rate cuts in 2025 amid expectations for stubborn inflation.5 Consequent rises in US Treasury yields and the dollar weighed on the gold price, leading to gold ETF outflows. But they were partially mitigated by sizable inflows generated from major gold ETF option expiries.6 A decline in broader market activity over the holiday season also influenced flows.

It is worth flagging that gold volatility has continued to reduce since the outcome of the election, but this may change in the run up to President Trump’s inauguration on 20 January, which may reignite investor interest.

European funds saw mild inflows of US$337mn in the last month of the year. Inflows were largely driven by increased demand in France, which can be attributed to the ongoing political turmoil as a new French government is formed.7 We believe elevated geopolitical risks continued to contribute to European inflows, although these were largely offset by outflows from Switzerland – mainly from FX-hedging products amid the weakening local currency against the dollar – and Germany – potentially driven by a sharp rise in its government bond yields. FX movements also resulted in a marginal drop in regional holdings despite positive flows.

Asian funds saw inflows again in December, attracting US$748mn. China led the way: plunging government bond yields amid intensifying expectations of further rate cuts from the central bank and a weakening local currency on concerns of a potential trade war with the US drove up local investor safe-haven demand. India experienced its eighth consecutive month of inflows, albeit moderating, as rising equity market volatility and bullish sentiment towards gold continued to attract investors. Funds in other regions reported limited flows of US$35mn. This was driven by minor inflows from Australia and South Africa.

 

Gold trading volumes fell

Gold trading volumes averaged US$221bn/day across global markets in December, 24% lower m/m. The decline can be mainly attributed to lowering volumes at COMEX and Shanghai Futures Exchange as the limited gold price volatility discouraged tactical investors. Global gold ETF and OTC trading both fell 29% and 13.5%, respectively.

Global gold trading volumes have jumped in 2024, reaching US$226.3bn/day, 39% higher than 2023 and the highest on our record. Almost all markets saw peak volumes in value terms: OTC activities soared 37%; exchange-traded volumes, 40%; global gold ETF trading, 32%. Notably, volumes at Shanghai Futures Exchange rose the most, reaching a record high. And these increases were not solely driven by the record-shattering gold price; volumes measured in tonnage also improved across all sectors.

Total net longs of COMEX’s gold futures ended December at 764t, a 5% m/m fall. Money managers reduced their net long positions by 9% to 567t by the end of the month. We believe the gold price weakness and dollar strength likely contributed to diminished interest in gold futures trading. 

Nonetheless, 2024 money manager net longs averaged 555t, a notable pick up from 2023’s 289t and the highest since 2011. The gold price strength and rising safe-haven demand amid uncertainties stemmed from various fronts, we believe, attracted investors. 

 

Gold ETF flows

Data as of

Demand captures changes in global/regional gold holdings; fund flows capture the net amount of money (in USD) that comes in or out of gold ETFs globally/regionally. See methodology note.

 **Note: As of 1 July 2021, this dataset now includes several enhancements, which we believe improve the accuracy and usability of the data.

  • Fund aggregation: funds that include more than one asset or sub-asset class are now grouped and displayed as a single product. This allows tracking of total assets of individual funds over time more easily. This change applies mainly to various European funds (and a few other regions) which, for example, offer different listings of the same fund structure and that were previously treated in our universe, for simplicity, as distinct products.
  • Holdings accuracy: the estimation of gold holdings by converting net asset values (NAVs) of the different funds to tonnage now uses relevant regional gold price benchmarks for funds in China and India, which we believe is more precise. Previously, for ease of calculation, we used the LBMA Gold Price PM for all funds. Thus, differences between those benchmarks and the LBMA Gold Price, whether due to timing or due to local premiums, could result in a less accurate estimation of the gold holdings. This was especially noticeable for funds listed in China and India during days when the gold price experienced significant moves or there were regional holidays. 
  • Previously, changes in tonnes were calculated by converting a fund’s AUM (in USD) into gold holdings (in tonnes) and computing the difference over periods. However, currency movements and large daily and weekly gold price movements could distort the difference between tonnage change and US-dollar fund flows during short time horizons. We therefore adjusted tonnage change as a function of fund flows versus AUM and replaced the tonnage change field with fund flows (tonnes).
  • Now, for most funds, we estimate US-dollar fund flows, as described in section 2.3.2 below, and then convert those flows to fund flows (tonnes).
    Fund flows (tonnes) and US-dollar fund flows will now represent a more aligned explanation of investment demand for gold ETFs, while the true holdings of a fund, in US dollars and tonnage, will remain a close estimate, impacted by the currency and price volatility described above.
  • Based on our initial analysis, the changes are not likely to have a material long-term effect on historical information, particularly on a global or regional aggregate basis, but will adjust short-term fluctuations that can sometimes occur due to input data and timing variations.
  • As of 1st September the fund flows data includes an additional tab showing tonnage flows (Delta tonnes) for monthly and daily periods.

These changes may lead to some – generally minor – revisions of historical data.

Footnotes

  1. Holdings remained unchanged despite positive inflows due to: 1) differences in the gold price when the flows occur; and 2) changes in foreign exchange rates for (mostly European) currency-hedged products.

  2. Based on the LBMA Gold Price PM, which rose 26% in 2024.

  3. We define gold ETFs as regulated securities that hold gold in physical form. These include open-ended funds traded on regulated exchanges and other regulated products such as closed-end funds and mutual funds. A complete list is included in the gold ETF section of Goldhub.com.

  4. We track gold ETF assets in two ways: the quantity of gold they hold, generally measured in tonnes, and the equivalent value of those holdings in US dollars (AUM). We also monitor how these fund assets change through time by looking at two key metrics: demand and fund flows. For more detail, see our ETF methodology note.

  5. For more, see: Fed lowers rates but sees fewer cuts next year due to stubbornly high inflation | Reuters.

  6. We refer to regular monthly expiration of ETF options that occur on the third Friday of each month.

  7. For more, see Yet another French government | Politico.