According to a new report by the World Gold Council, holdings in global gold-backed ETFs rose 72 tonnes in January 2019 to reach 2,513 tonnes (80.8 million troy ounces), hitting the highest levels in nearly six years.
In dollar terms net inflows in January equaled $3.1 billion with the value of gold held in ETF vaults reaching just shy of $107 billion by the end of the month, a 6 per cent increase.
January 2019 was the fourth consecutive month of net inflows, according to WGC data and thanks to a blockbuster December 2018, 185 tonnes or $8 billion was injected into the scores of funds listed around the world over the past four months.
More than $112.5 billion of gold was traded on average each day in 2018
The industry body says the inflows were driven by market uncertainty and a shift in sentiment that drove the price of gold 3.5 per cent higher in January.
Fund flows strongly reversed the Q3 2018 declines with total inflows of 9 per cent over the past four months.
North American gold investors led the buying with funds in the region, enjoying 53 tonnes or $2.2 billion of net inflows.
Low-cost ETFs, defined by the WGC as funds that charge less than 2 per cent management fees, are becoming particularly popular adding 16 tonnes (worth roughly $700 million) over the past six months, representing a growth of 53 per cent.
WGC notes that global gold trading volumes increased in January on par with 2018 averages. More than $112.5 billion of gold was traded on average each day in 2018 in over-the-counter transactions, futures exchanges and ETFs.
The WGC says it believes “net longs increased yet remain below historical averages.“ A recent study by the WGC showed bearish positioning in futures historically precedes strong rallies in the price of gold.