The outflow of gold from global exchange-traded funds (ETFs) continued for the tenth consecutive month in February, the longest losing streak since January 2014.
Investors are shifting their investment away from gold-backed instruments as the hawkish US Federal Reserve signalled a further rise in interest rate to tame the run-away inflation.
The overall outflow from global gold ETF was $1.7 billion with Europe recording the highest outflow of $1.24 billion, according to the latest World Gold Council report.
However, India registered an inflow of $33 million and its holding increased by one per cent to $2.5 billion. In volume, it was up marginally by 0.5 per cent to 38 tonnes.
What discouraged investors
China registered an outflow of $45 million. In volume terms, it was down 0.7 per cent at 47 tonnes. Overall, its holding was at 47 tonnes valued at $2.8 billion.
The United Kingdom, which is deep in economic recession, witnessed the highest outflow of $740 million followed by the US and Switzerland registering an outflow of $541 million and $210 million.
A strong dollar and rising yields led to a 5 per cent decline in the gold price, which discouraged investment gold ETF. Outflows were widespread, with the exception of funds in the other region, where collective holdings rose marginally, said the report.
The overall collective gold ETF assets under management declined by one per cent to $200 billion. In terms of volume, it was down 34 tonnes. During the first two months of this year, global gold ETFs lost 61 tonnes valued at $3.4 billion.