How gold ETF & ETC holdings have evolved

Gold-backed gold funds and ETCs are among the younger asset classes to be traded on stock exchanges. The Central Fund of Canada, a fund entirely backed by physical gold, was listed on the Toronto Stock Exchange as early as 1996. Gold funds as we know them today have, however, been only available for trading in North America since 2004, when the SDPR Gold Shares were introduced on the New York Stock Exchange. In many European countries, the first Gold-backed investment products were not listed until two years later.

UCITS guidelines prevented simultaneous ETF launch in Eurozone

Due to the legal framework, ETFs on gold do not exist within the Eurozone, a problem solved with the introduction of bearer bonds fully backed by the precious metal, such as Xetra-Gold. These instruments make up for the disadvantage compared to ETFs, which offer investor protection as special assets. The two-year introduction delay initially caused a much faster growth of gold holdings in North American ETFs than anywhere else in the world. By late 2008, overseas gold holdings amounted to 858 tonnes, but to only 295 tonnes in Europe. Global gold holdings managed in gold funds and ETCs amounted to 1,156 tonnes at that time.

Sharp rise in wake of financial crisis

Exactly 10 years ago, at the end of September 2012, gold holdings in ETFs and ETCs had risen to 2,700 tonnes, of which 1,682 tonnes were managed in North America alone. Europe had caught up significantly with holdings of 871 tonnes.

To date (as of 16.09.2022), the European gold holdings have nearly doubled to 1,626 tonnes, being almost on par with North American holdings at 1,861 tonnes. A total of 3,620.5 tonnes of gold are currently managed in ETFs and ETCs globally, more than three times the 2008 level of worldwide gold holdings. The historical peak in managed gold holdings was reached during the Coronavirus pandemic, on 6 November 2020, at 3,926 tonnes.