More than six tonnes of gold liquidated from the global ETF in December, the ETF’s holdings fell by 173 tonnes in 2021 – WGC

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(Kitco News) – A fitting end to a disappointing year saw global gold-backed exchange traded funds (ETFs) further outflows in December, according to the latest data from the World Gold Council.

In a report released Friday, the WGC said 6.4 tonnes of gold flowed out of global ETFs last month. December was a year in which a total of 173 tonnes of gold were liquidated from ETFs worldwide, the report noted.

The outflow last month was led by North America as funds liquidated 22 tonnes of gold last month. The report added that European-based and Asian-based funds experienced an inflow of a total of 16 tonnes.

“North American outflows again stemmed from larger U.S. funds, likely triggered by the US Federal Reserve (Fed), which states its intention of more rate hikes in 2022 to combat decades of high inflation while planning to slow down asset purchases early in the year,” it said. the analysts in the report.

Many analysts have noted that the fall of gold of almost 4% in 2021 was due to a lack of investment demand as the sector experienced a constant outflow throughout the year. However, the WGC noted a positive from last year.

“Despite significant outflows for the year, the gold ETFs remain significantly above pre-pandemic levels as they had record inflows of approximately 875 t during 2020,” analysts said.

In 2022, the WGC sees a mixed outlook for gold, as historically low real interest rates are weighed against rising inflationary pressures against the Federal Reserve’s tightening of monetary policy.

“We remain vigilant over the development of monetary policy and a possible rise in interest rates at a faster pace, as indicated by the Federal Reserve’s latest announcement, which may hamper the gold result. Historically, however, interest rates remain low and will continue to support gold demand given its role as a high-quality liquid asset as the portfolio structure continues to change to meet market volatility, “said Adam Perlaky, senior analyst at WGC, in a statement.

Disclaimer: The views expressed in this article are those of the author and may not reflect them Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. or the author guarantees such accuracy. This article is for informational purposes only. It is not an invitation to make any exchanges of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept liability for losses and / or damages arising from the use of this publication.

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