The Briefing
- Gold ETF inflows in 2020 amounted to $47.9B (877.1t), more than doubling 2019’s inflows
- This marks the fifth straight year of inflows into gold ETFs, almost doubling the previous record inflows in 2016 of $24.1B (541.1t)
Gold ETFs See Record Inflows in 2020
Gold had a strong year with 25% returns, and gold ETF inflows followed, reaching a new record high of $47.9 billion in 2020.
Gold-backed and gold ETFs have increasingly become a vital part of the gold investment market, making up around two-thirds of global net inflows for investment demand in the precious metal.
While gold set new all-time highs around $2,075/oz in 2020, gold ETF inflows ($47.5B) almost doubled the previous record-year of inflows (2016, $24.1B), and eclipsed 2013’s record year of outflows ($-41.6B).
| Year | Total Flows in Tonnes | Total Flows in USD |
|---|---|---|
| 2003 | 42.5t | $0.1B |
| 2004 | 125.4t | $1.5B |
| 2005 | 218.9t | $3.3B |
| 2006 | 260.2t | $4.8B |
| 2007 | 251.5t | $5.6B |
| 2008 | 311.0t | $11.2B |
| 2009 | 649.0t | $19.3B |
| 2010 | 388.6t | $14.8B |
| 2011 | 260.0t | $11.8B |
| 2012 | 251.9t | $17.1B |
| 2013 | -887.1t | $-41.6B |
| 2014 | -149.3t | $-5.0B |
| 2015 | -129.3t | $-3.5B |
| 2016 | 541.1t | $24.1B |
| 2017 | 271.6t | $9.8B |
| 2018 | 70.1t | $4.0B |
| 2019 | 398.3t | $19.1B |
| 2020 | 877.1t | $47.9B |
Gold futures also saw increased participation in 2020, with aggregate open interest reaching yearly record-highs of $120.9B as investors and traders sought gold exposure.
North American Funds Represent Most Gold ETF Inflows
In terms of regionality, North American funds accounted for almost two-thirds of global net inflows from Q1-Q3’2020, reaching a total inflow of $31.9B for the year.
SPDR Gold Shares (GLD), the first U.S. gold ETF launched in 2004, made up the majority of North American inflows at $15.4B. Interestingly, this one ETF alone eclipsed Europe’s entire inflows for 2020 ($13.3B).
While Gold ETFs in Asia only reached $1.9B last year, their holdings saw the greatest percentage increase of all regions (49%) with seven new Chinese funds listed in 2020.
Gold ETFs are Driving Gold Investment Demand
Although flows turned negative in November ($-6.8B) and December ($-2.2B) of 2020, Gold ETF flows have returned positive for the first couple of weeks of 2021, with a $2.1B inflow as of Jan 15, 2021.
This return to positive ETF flows came as gold fell more than 5% from its $1,950 highs reached in early January. This could be a sign of gold ETF investors buying the dip, as gold potentially begins to turn upwards for the final two weeks of January.
Since gold ETFs make up such a large part of gold investment demand, keeping an eye on ETF flows can offer insight into where the precious metal might be headed.
»If you found this article interesting, you might enjoy this post on the ETFs: Visualizing the Expanse of the ETF Universe
Where does this data come from?
Source: World Gold Council
Details: The World Gold Council aggregates data from Bloomberg, ICE Benchmark Administration, and company filings.
