Investors retreated from gold-based exchange-traded funds in February, as volatility in the price of the precious metal made it a less-attractive haven asset despite U.S. stocks seeing sharp losses over the same period.
According to Gold.org, an industry data group, gold funds experienced outflows of $142.3 million over the month, which translates into 5.1 metric tons of physical gold (popular gold products are backed by physical gold).
The redemptions were largely driven by European funds, which had $237.1 million in outflows over the course of the month. North American-listed gold funds had outflows of $196 million during the month.
“Flows were negative as the price of gold decreased and its volatility increased,” Gold.org wrote in a report.
The North American outflows were due to the SPDR Gold Shares
which had outflows of $478.2 million over the month, according to data from ETF.com. The fund, the largest to track the price of gold, is often used as a short-term trading vehicle due to its liquidity. A rival gold product, the iShares Gold Trust
had inflows of $189 million over February.
The price of gold
fell 1.9% over the month of February, its biggest one-month percentage decline since September. The SPDR Gold Shares fell 2.1% over the month.
Don’t miss: Silver’s poised to outpace gold this year
Losses over the month came as the U.S. dollar
strengthened, snapping a three-month losing streak. The rebound in the buck came as concerns over inflation returned to markets, raising the possibility that the Federal Reserve could become more aggressive in raising interest rates. Those concerns contributed to both the Dow Jones Industrial Average
and the S&P 500
last month suffering their first correction—defined as a 10% drop from a peak—in about two years.