The global gold market saw significant activity in December 2024, with inflows into gold exchange-traded funds (ETF) reaching a six-year high. This increase, driven by strong buying in Asia, offset outflows in North America. Despite a decline in global gold ETF and OTC trading, overall trading volumes surged to record levels, hitting $226.3 billion per day, the highest on the World Gold Council’s record.
In Asia, funds in India and China attracted substantial inflows as investors sought safe-haven assets amid market volatility and geopolitical tensions. Meanwhile, North American funds experienced outflows as the US Federal Reserve signaled a less dovish stance on interest rates, leading to a rise in Treasury yields and the US dollar, which weighed on gold prices.
European funds saw mild inflows in December, with increased demand in France amid political turmoil. Other regions reported limited flows, with minor inflows from Australia and South Africa. Overall, global gold trading volume dropped in December, with lower volumes at COMEX and the Shanghai Futures Exchange due to reduced gold price volatility.
Meanwhile, gold futures markets witnessed profit-taking and a decrease in managed money net long positions, reflecting diminished interest in gold futures trading. Despite these trends, 2024 saw a notable increase in money manager net longs compared to the previous year, driven by rising gold prices and heightened haven demand.
Looking ahead, uncertainties surrounding the US presidential transition and geopolitical risks could reignite investor interest in gold, potentially leading to increased trading volumes and inflows into gold ETFs. Overall, the global gold market remains dynamic and influenced by various economic and geopolitical factors, making it a key asset for investors seeking diversification and hedging opportunities.
