The divergence between the attitudes of EMEA and US-domiciled ETF investors towards gold has reached the highest level since 2013, as European buyers continue to pour money into gold ETPs, while US-listed counterparts are seeing outflows.
In July, the difference between European inflows and US outflows from gold products reached $2.8bn, the largest in four years, according to BlackRock’s latest ETP Landscape Report.
While EMEA-listed gold ETPs attracted $500m in July, US investors took $2.3bn out of the asset class, in an accentuation of a trend witnessed throughout 2017 so far.
According to BlackRock, US investors appeared to be taking profits ahead of a payrolls report in early August, as the price of gold gained momentum as a result of weakness in the US dollar during the month.
US-listed gold ETPs saw outflows in four out of the first seven months of the year, while EMEA-listed equivalents have seen consistent inflows, reaching a combined $3.4bn this year to 31 July.
Some of the demand for gold has been driven by geo-political and macro fears, which have recently been reignited by renewed tensions between the US and North Korea.
Last week, US President Donald Trump threatened large scale military action on North Korea, which sent global markets on a downward spiral and further sparked appetite for gold investing, sending the gold price up to $1,287/oz by Friday 11 August.
Overall, European investors were more keen on commodities than their US counterparts in July, with broader EMEA-listed commodity ETPs attracting $748m of inflows, while globally commodity products suffered outflows of $2.7bn, the largest since December 2016.
According to Lyxor’s Monthly European ETF Market Trends report, the July inflows marked a one-year record high, as European investors looked towards the safe-haven status of precious metals.
Meanwhile, equities were the overall leader in terms of flows, taking in some $5.5bn during the month, or 62% of overall flows, which took the asset class back into the lead after briefly giving up the top spot to fixed income.
Investors were positive on risk-on assets, despite continued worries over politics and its impact on stock markets, with European investors particularly keen on European equity products.
EMEA-listed European equity ETPs saw inflows of $3.7bn, marking the eleventh consecutive month of inflows and the longest inflow run on record.