Gold Prices Soar, But Investors Flee ETFs as Central Banks Load Up

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Gold Prices Soar, But Investors Flee ETFs as Central Banks Load Up

Gold ETFs See Outflows Despite Rising Prices

The world's largest gold exchange-traded funds (ETFs) have experienced net outflows of $3.946 billion year-to-date, despite a 13% increase in gold prices. This trend is attributed to several factors, including rising interest rates, lack of periodic cash flows, and higher management fees associated with gold ETFs.

Central banks, on the other hand, have been actively buying gold, with net demand reaching 290 tonnes in the first quarter of 2024. This represents the strongest start to a year on record, driven by geopolitical uncertainty and inflationary pressures.

Hedge funds and other large speculators have also increased their net-long positions in gold futures and options, suggesting a growing interest in the precious metal. However, overall activity across gold ETFs remains muted, indicating a cautious approach from retail investors.

Gold prices have risen 13% year-to-date.

Gold ETFs have experienced net outflows of $3.946 billion.

Central banks have been actively buying gold, with net demand reaching 290 tonnes in the first quarter of 2024.

Hedge funds and other large speculators have increased their net-long positions in gold futures and options.

Overall activity across gold ETFs remains muted.