Total assets under management (AUMs) in gold-based exchange-traded funds (ETFs) hit record highs of $271 billion in 2024, according to the World Gold Council (WGC).
This represented a 26% year-on-year increase and was driven by a soaring bullion price.
Total ETF inflows were modest, at $3.4 billion, although this was the first positive result for four years.
The WGC said that “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.”
However, collective holdings dipped by seven tonnes over the course of 2024, to 3,219 tonnes.
The council said that “a few key factors” were behind improved gold ETF flows last year.
These included “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, [and] the strongest annual gold price performance since 2010.”
The yellow metal hit new all-time highs on 40 occasions last year, the WGC noted. Over the whole year, gold appreciated 26% in value to around $2,629 per ounce.
First December Rise Since 2019
Gold funds also enjoyed a strong end to the year as they recorded their first December inflow for five years.
WGC data showed positive flows of $778 million, or four tonnes.
This was despite North American ETFs breaking a run of five straight inflows. Funds there experienced outflows of $342 million to take total AUMs down to $139 billion.
Physical holdings declined to 1,651 tonnes, down five tonnes year on year.
The WGC said that “despite the anticipated 25 basis point 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.”
It added that “consequent rises in US Treasury yields and the dollar weighed on the gold price, leading to gold ETF outflows.”
Europe And Asia Record Inflows
Funds in Europe, however, recorded inflows of $337 million that took total AUMs to $108 billion. That’s even though physical holdings dropped fractionally to 1,288 tonnes.
The WGC said that “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.”
Meanwhile, Asian funds added nine tonnes of the precious metal to take cumulative holdings to 216 tonnes. Inflows of $748 million propelled total AUMs to $19 billion.
The council said that “China led the way” with fund inflows last month. It commented that “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.”
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