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Gold-Backed ETFs post $1.3 billion in outflows in November - World Gold Council

Kitco News

(Kitco News) -All-times highs in U.S. equity markets and a renewed strength in the U.S. dollar weighed on the gold market, with exchange-traded funds posting broad-based outflows last month, according to the latest data from the World Gold Council (WGC).

In its monthly ETF report, the WGC said that the gold market saw $1.3 billion in outflows across all regions. But it’s not all bad news for the precious metal as holdings are up significantly on the year.

“Overall, global gold-backed assets under management grew 35% this year as a result of increased investment demand and price appreciation,” the WGC said in its report.

Looking at regional outflows, North American funds saw the biggest outflows of 17.3 tons valued at valued at $731 million due to a strong U.S. dollar and equities seeing its strongest month since June.

Meanwhile, European funds, led by U.K.-listed ETFs saw outflows of 13.3 tons, valued at $538 million. The WGC noted that investor sentiment shifted in November as the deadline for the U.K. to leave the European Union was pushed to 2020.

In Asian, the regional markets saw outflows of 2.1 tons, valued at $119 million.

The WGC noted that the outflows came as gold prices fell 3.4% from October’s highs. However, even with November’s decline, prices are up 14% for the year.

Looking ahead, the WGC said it remains optimistic that ETF demand will remain strong through 2020.

“Uncertainty surrounding 2020 Fed expectations, together with increased bullish market sentiment, is set to impact gold’s price performance,” the analysts said. “However, the opportunity cost of investing in gold remains strong with Comex net longs at near all-time highs and over 70% of sovereign debt trading with negative real rates.”

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