Gold holdings in ETFs/ETCs worldwide almost doubled over the last decade

Since November 2014, global holdings in gold funds and ETCs have grown from 1,730 to 3,231 tonnes. Meanwhile, regional growth has varied greatly: while the US recorded an increase of only 59 per cent, European ETFs and ETCs have grown by 105 per cent. The strongest growth in gold holdings was seen in Asia, where they increased more than fivefold over the last ten years. This is due to the pent-up demand for gold investments, particularly strong in China compared to the western industrialised nations. While Asia has the largest percentage of inflows into gold funds, the latest World Gold Council data has shown that the managed gold holdings in the region accumulate to only 206 tonnes – a very small amount compared to the 1,654 tonnes in the US and the 1,286 tonnes in Europe.

Net outflows for European gold funds and ETCs in 2024 
 

The long-term development of gold holdings under management clearly shows that gold investments in exchange-traded funds or gold-backed exchange-traded commodities, as introduced in the Eurozone, are now firmly established globally as an alternative to gold bars and coins. Nonetheless, physically backed European ETCs in particular have seen outflows this year, which may also be due to the cost-efficient tradability of these securities compared to physical gold.

High gold price should not tempt investors to sell out
 

In 2023 and the first half of 2024, it was primarily the increased appeal of government bonds and money market products due to a respective interest rate policy that led to gold sales across the US and Europe. In recent months, it has mainly been the high gold price which motivated investors to take profits. They should, however, remember to retain the recommended gold allocation of 10 per cent in their portfolios to maintain the precious metal’s portfolio stabilising benefits. Gold offers a sound diversification from equities and bonds and is regarded a safe haven. In this context, gold can be classified as a kind of silverware, to be kept in the family and not to be sold without need.