Gold ETFs Record Fourth Consecutive Week of Positive Inflows as Prices Hold Near $4,400 an Ounce

Net investments in physically backed gold exchange-traded funds (ETFs) remained positive for the fourth week in a row, according to data from the World Gold Council (WGC). The yellow metal's price ruling near $4,400 an ounce continued to attract investor interest.

In the week ended August 7, total inflows into gold ETFs reached $4.88 billion, while outflows stood at $1.36 billion. These inflows were primarily led by the UK and US, whereas Chinese investments recorded a negative $9.2 million for the week.

Year-to-date, net investments in the ETFs are positive at $17.22 billion, driven by $97.88 billion in total inflows against $80.66 billion in outflows. China and India have played a significant role in keeping inflows positive, with combined investments reaching approximately $11 billion.

During the specific week analyzed, UK investors added $1.53 billion, while US investors contributed $1.04 billion. Additional contributions came from Germany and France, with over $300 million each, alongside Japan with $174 million. On the other hand, year-to-date data indicates US investors have redeemed $5.19 billion, alongside withdrawals of $279 million by Canadians and $234 million in exits from Italy.

Across Asia, China's cumulative investments are valued at $7.01 billion, with India at $3.96 billion. Other regional contributors with net positive investments include the Hong Kong Special Administrative Region ($960 million), Japan ($844 million), South Korea ($691 million), and Singapore ($327 million).

The precious metal has experienced a downward trend after peaking at a record $5,608 an ounce on January 29 of this year, shedding 22 per cent since that time. On Monday, gold was quoted at $4,385 an ounce at 1915 hours IST. The metal's prior declines were driven by inflation fears, US Fed rate hikes, and rising bond yields, though recent economic developments have aided recovery from around the $4,000 mark.

Industry experts note that macroeconomic and geopolitical factors continue to influence market sentiment. Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd and President of India Bullion and Jewellers Association Ltd, pointed out that gold held onto most of its recent rally despite profit-taking. He cited ongoing geopolitical tensions, including the Strait of Hormuz standoff and Brent crude fluctuations impacting the rupee.

Meanwhile, Renisha Chainani, chief research office at Augmont, stated that upcoming economic indicators—such as FOMC minutes, July industrial production data, the Philadelphia Fed Manufacturing Index, and flash August PMIs, alongside remarks from Fed Chair Kevin Warsh at the Jackson Hole symposium—will serve as the next major catalysts for precious metals.

"The steady inflows into gold ETFs over the past four weeks highlight gold's enduring role as a safe-haven asset during periods of macroeconomic uncertainty and geopolitical friction. While retail and institutional investors navigate fluctuating bond yields, inflation fears, and currency pressures, the resilience of year-to-date net investments at $17.22 billion demonstrates sustained global demand. For entrepreneurs and investors, understanding these broader commodity market trends is essential, as macroeconomic volatility frequently influences capital allocation across all asset classes." — Dr. Shishir Gupta, Founder & CEO, StartupLanes