Gold ETF Price Review 2019

Gold-backed exchange traded funds (ETFs) reached all-time highs in 2019, growing on average around 14% worldwide. In US dollar terms, these ETFs had net inflows of around $19.2 billion, which represents just over 400 metric tons of gold. These net inflows were mostly driven by funds in North America and Europe, which increased by 14.4% and 13.6% respectively. A note of interest, however, is that ETF flows in Asia were relatively flat throughout 2019, dropping by 0.3%, which perhaps could be explained by the Asian tradition of generally favouring physical gold possession. 

Gold ETF flow in Metric Tons in 2019 - World Gold Council

The figures above refer to ETFs that are backed by at least 90% physical gold and the World Gold Council (WGC) make adjustments based on estimations on physical gold holdings. ETFs are securities that can be bought on a stock exchange and in this case may not be fully backed by gold; Gold ETF holders do not actually own the gold they have “bought” but rather possess a share in a fund, which is essentially a debt. However, these shares do track the live price of gold and will fluctuate accordingly. 

Whilst possessing physical gold is the proper way of owning the precious metal, gold ETFs give an indicator as to the expectations of investors. With these figures, it may be a sign that investors are getting spooked by rising geopolitical concerns and warnings from world financial institutions on the state of the global economy.

Gold Price in US dollars in 2019

We have a guide for choosing between gold ETFs or physical gold and on paper gold for interested investors.