Gold-Backed ETFs Attract $3.7B in Investments: What to Know

The global gold exchange-traded funds (ETFs) have raked in $3.7 billion in new investments, signifying their largest inflows since April 2022. The World Gold Council (WGC) stated that the latest milestone marks the third consecutive month of inflows for gold-based ETFs featuring North American and European funds.

Global Gold ETF Performance

The WGC report stated that Western gold ETFs exerted the largest influence, setting the pace for increased global gold assets under management (AUM). By the end of July, the worldwide AUM had reached a new record of $246 billion thanks to the combined impact of these inflows and a 4% increase in the price of gold.

This milestone coincided with a 48-ton expansion in collective gold holdings, reaching 3,154. In July, $2 billion in inflows were recorded into gold ETFs in North America, indicating a recovery in the asset class.

North America’s Resurging Gold ETFs

The little outflows seen in May and June were reversed by this inflow, indicating that gold is once again being sought as a safe-haven asset. Political unpredictability and the expectation of a more accommodating monetary policy—stoked by remarks made by US Federal Reserve Chair Jerome Powell—were the main factors behind this shift.

It is important to note that North American gold ETFs have had outflows totaling $2.9 billion this year, with holdings falling by 52 tonnes.

European and Asian Gold ETFs Performance

Furthermore, the European gold ETF market recorded inflows for three months, with an additional $1.2 billion in July alone. The July inflows were mostly due to falling bond yields and anticipation of greater monetary easing by the Bank of England and the European Central Bank.

The total assets under management (AUM) of European gold ETFs increased by 12% to $103 billion due to these variables combined. On the other hand, Asian gold exchange-traded funds (ETFs) kept rising, with India at the forefront.

Asian gold exchange-traded funds have received the largest inflows compared to other regions, totaling $3.6 billion as of this writing. Accordingly, Asian gold ETFs’ total assets under management (AUM) have reached a record $15 billion.

Ethereum ETFs’ Promising Outlook

Along with the gold market’s bullish tendencies, Ethereum (ETH) has also demonstrated encouraging signals of a price surge. Spot Ether ETFs have drawn attention from investors lately with significant inflows.

On August 13, these ETFs saw daily inflows of $24.34 million, the second positive inflows after $4.93 million the day before. With $7.65 billion in net assets, Ethereum ETFs currently hold 2.36% of Ether’s total market capitalization.

With significant inflows of $49.12 million on August 13, BlackRock’s Ethereum ETF is the top-performing ETF, with net inflows of $950.38 million. The Fidelity Ethereum ETF came in second, with inflows of $5.41 million, bringing its total net inflows to $351.1 million.

Grayscale’s ETHE, however, noted sustained daily withdrawals as it lost $31.01 million, bringing its net withdrawals to $2.38 billion. Even though these ETFs have not recorded much inflows since they were introduced, there is increasing anticipation that trading volumes will progressively rise.

Furthermore, recent macroeconomic conditions have undermined investor confidence in these assets. Meanwhile, some analysts forecast that the increased interest in these ETFs could provide Ethereum’s price with some positive momentum.

Renowned crypto trader and analyst Michaël van de Poppe predicted that the steady inflows and steady performance of Ethereum ETFs will probably continue and coincide with a steady increase in Ethereum’s price, which would portend good news for the asset.

Is a US Spot XRP ETF on the Horizon?

Meanwhile, Bitnomial Exchange LLC self-certified a new futures contract for XRP with the Commodity Futures Trading Commission (CFTC) on August 9, 2024. Bitnomial’s official filing outlines the contract’s structure, emphasizing compliance with CFTC’s core principles, including market manipulation prevention, trading practices, market disruptions, and financial integrity.

The XRP US Dollar Futures contracts (XUS) were set to commence trading on August 13, 2024. However, the official website does not list XRP Futures.