Gold ETF Flows Shift Course

July 26, 2018

Physical gold ETFs, like the SPDR Gold Trust (GLD) and the iShares Gold Trust (IAU), have been bleeding assets over the past several months, even as gold miner stock ETFs have pulled in millions in new net inflows.

From April 1 to July 24, the 11 physical gold ETFs saw a combined $2 billion in outflows. Most of that came from the $31.7 billion GLD, which lost $1.7 billion over the period; and IAU, which lost $330 million and has $10 billion in assets under management.

At the same time, gold miner ETFs, led by the VanEck Vectors Gold Miners ETF (GDX) and the VanEck Vectors Junior Gold Miners ETF (GDXJ), have brought in $861 million in new net inflows. More than half of that, or 62%, went into junior gold miner GDXJ.

Reversal For IAU

For IAU, the outflows have lasted for roughly two months, breaking a 19-month streak of inflows that began near the end of 2016. Between Dec. 29, 2016 and May 5, 2018, more than $4.1 billion flowed into IAU, with only 19 days of recorded outflows:


Sources:, FactSet; data as of July 24, 2018


GLD's flows tend to be more cyclical and variable, reflecting its usage by many traders and institutional investors as a short-term instrument rather than a buy-and-hold investment. Still, it too has seen an extended—mostly unbroken—period of outflows, starting on May 1:


Sources:, FactSet; data as of July 24, 2018


Gold Prices Lag

The outflows in physical gold ETFs can likely be attributed to anemic gold prices, which have been trending down for the past 12 months. In particular, from April 1 to July 24—the period of outflows in GLD and IAU—the price of gold fell 7%, from $1,326.29/oz to $1,233.26/oz.

Performancewise, GLD is down 7.7% over the past three months, while IAU is down 7.6%.

Rising interest rates may also have impacted gold investment, as investors move into higher-yielding bonds and other fixed-income investments and out of gold, which offers no yield (but costs money to store and insure).

Year-to-date, however, inflows into the two major physical gold ETFs have been somewhat more positive than the past quarter's data. GLD has seen net outflows of $1.3 billion, which is less money than it has lost over the past quarter. Meanwhile, IAU has seen net inflows of $870 million, as the fund continues to chip away at GLD's market share.

Flows High For Gold Miner ETFs

May 1, the day GLD first began seeing significant outflows, was also the same day that GDXJ, the junior gold miners ETF, commenced its current streak of inflows. The two events may or may not be connected, but the timing coincidence is intriguing.

Since April 1, GDXJ has taken in $534 million:


Sources:, FactSet; data as of July 24, 2018


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