The physical outflows from gold Exchange Traded Products (ETPs) totaled $4.17 billion in the third quarter, declining sharply from the Q2 outflows of $18.54 billion. The gold ETP outflows have fallen by 78% over the quarter.
According to ETF Securities, institutional investors looking for quick returns in gold were responsible for the substantial physical outflows from gold exchange-traded products during the third quarter. The month of April witnessed the peak of outflows fuelled by the panic sell off when gold prices dropped sharply around April 15. SPDR Gold Trust-the world’s largest gold ETP saw erosion of gold holdings due to heavy selling by hedge funds.
However, since April outflows from gold ETPs moderated with each succeeding month. The outflows in August totaled $673 million. However, the ETP outflows zoomed 77% in September to $1.19 billion, mainly on the back of confusions surrounding Fed’s tapering of ‘asset-purchasing program’.
On the other hand, diversified broad ETPs posted inflows of $779 million during the third quarter. The second largest inflow was seen in silver-ETPs at $707 million, followed by Platinum at $172 million.
The good news though is the fact that gold ETPs also have begun seeing modest inflows from investors during late September.