North American gold ETFs pulled in $7.7 billion in August, up from just $71 million in July, pushing global gold holdings to a record 4,189 metric tons. Days later, the Federal Reserve's rate hike lifted real yields and pressured gold prices, raising the question of whether the rush marks a durable shift or a fading momentum trade.
North American physically backed gold ETFs took in $7.7 billion in August, a roughly 108-fold jump from July's $71 million, according to World Gold Council data. The region's third-highest monthly inflow on record landed weeks before the Federal Reserve's September policy move.
A global rush into bullion
The August wave was not confined to North America. It formed part of an $18 billion global inflow into gold funds that pushed collective holdings to a record 4,189 metric tons. European-listed funds actually led the pack, pulling in $7.9 billion, their strongest single month on record, with the UK and France as notable drivers, while Asia added $2 billion. More than $4 billion of North America's total arrived in just five trading days during the week of August 17, a pace of buying that looked more like a stampede than a rotation.
What is behind the flows
The World Gold Council pointed to strong gold price momentum, mounting concerns about fiscal sustainability, stress in the Treasury market, and fears of dollar debasement. This also marks a comeback: North American gold ETFs had shed $13 billion in outflows back in March, one of the sharpest monthly exits on record, and August's inflows pushed the region's year-to-date flows back into positive territory.
The Fed hike complicates the picture
The rush ran straight into a rate hike. The Fed raised its policy rate by 0.25 percentage point on September 16, lifting its target range upper bound to 3.75%. Spot gold slid 1.2% to $4,240.10 an ounce on the news, and the low-cost SPDR Gold MiniShares Trust (GLDM) closed near $85.
Rising real yields raise the opportunity cost of holding an asset that pays no return of its own. The 10-year real yield climbed from 2.42% on September 3 to 2.68% on September 16.
GLDM is down 3% over the past month even as it still returns 236% over ten years on its 0.10% expense ratio. Whether August's flows mark a floor or a top for gold now hinges on where real yields go next.
Sources: 24/7 Wall St. via Yahoo Finance, Crypto Briefing
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