Gold prices fell 12% in March to USD 4,608/oz, its weakest month since June 2013, according to a report by the World Gold Council (WGC). The precious metal lost value across all major currencies but maintained a positive position for the year.
The council used its monthly Gold Return Attribution Model (GRAM) to identify that much of the decline stemmed from momentum factors, including global gold ETF outflows, a COMEX net long unwind, and a price trend reversal.
Global gold ETFs shed USD 12bn (84 tonnes) during the month, led almost entirely by North America with USD 14bn (-87t) and Europe with USD 0.1bn (-7t). Asia's USD 1.9bn (10t) inflows were a welcome positive, and highlight how dipbuying in Asia translated into much larger fund flow but lower equivalent tonnes.
While real yields and the dollar undoubtedly contributed to net sales, other factors were also likely at play, including positioning, retail exposure, and commodity trading advisors selling.
Looking ahead, the World Gold Council found that fundamentals began to reassert themselves as the dollar struggled to sustain gains and early April ETF flows turned positive.
