Gold ETF rush defies 8.5% gold price slide

AI desk brief

Gold ETFs attracted a record $31bn in Q3 and $10bn in September even as bullion fell 8.5% for the month to $4,176/oz, showing a sharp divergence between passive investment demand and futures positioning. The WGC said holdings rose 67 tonnes to a record 4,256 tonnes, while Comex managed-money positions fell by 84 tonnes and spread positions by 156 tonnes, suggesting the price drop was driven more by futures liquidation than outright demand destruction.

Macro headwinds were clear: the U.S. 10-year Treasury yield rose 53bp to 5.3% in September and the dollar index gained 2%. Still, ETF inflows persisted, with $1.4bn last week alone, while physical support remained intact in India and China and central banks added 39 tonnes in August, led by China, Poland and Uzbekistan. BMO/WGC argue investors are increasingly using gold against fiscal and bond-market risks, not just as a crisis hedge.