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Gold mining ETFs draw first monthly inflow in six months

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Investors return as gold hits record highs, boosting

margins

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Newmont ( NEM ), Barrick shares rebound after 2024

underperformance

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Miners announce buybacks, dividends on strong earnings

By Patturaja Murugaboopathy

March 24 (Reuters) - Funds that invest in gold miners

are set to attract their largest net monthly inflows in more

than a year in March, as record-high gold prices improve firms'

profit outlooks and boost cash flow.

Although gold prices also rose last year, miners still

struggled to offset inflation-driven spikes in labour and fuel

costs while facing regulatory hurdles such as tax disputes in

Mali and project delays in Canada.

As a result, investors mostly shunned equity funds focused

on gold miners, opting instead for traditional gold funds that

offered a safe haven during the Russia-Ukraine war and

escalating trade tariff concerns after Donald Trump won the U.S.

election in early November.

According to LSEG Lipper data, funds investing in physical

gold and gold derivatives attracted a net $17.8 billion in 2024,

the highest in five years, while funds investing in gold miners

lost a net $4.6 billion, the most in a decade.

With gold up more than 15% this year to a record high above

$3,000 an ounce, investors are more optimistic that miners can

absorb higher costs, expand margins and generate stronger cash

flows.

Shares of top miners such as Newmont ( NEM ) and Barrick

Gold ( GOLD ), have more than reversed 2024 falls of 10% and 7%,

respectively, surging around 27% and 21.5% so far this year.

Funds targeting gold miners drew their first net monthly

inflow in six months in March, according to Lipper data,

attracting $555.3 million, the highest since November 2023.

"In recent years, gold mining companies have faced cost

pressures, but are now increasingly able to benefit from higher

gold prices. We are adding to them," said Shaniel Ramjee, a

multi-asset co-head at Pictet Asset Management, based in London.

"At current gold prices, the profitability returns," he

added.

Barrick Gold ( GOLD ) announced a $1 billion share buyback offer

after reporting a solid profit and doubling its free cash flow

in the fourth quarter.

AngloGold Ashanti ( AU ) said its balance sheet was the

strongest in more than a decade and declared a final dividend of

91 U.S. cents per share - nearly five times higher than for the

prior year.

Gold Fields has also indicated it could initiate a

share buyback this year, while Harmony Gold plans to

self-fund the construction of a new copper mine in Australia.

"Investors looking to diversify their portfolios and hedge

against market uncertainty and inflation may finally turn their

attention to gold mining equities," said Imaru Casanova,

portfolio manager for gold and precious metals at VanEck.

"We have a positive outlook on the gold price, and given the

low valuations for the gold miners, we are even more

constructive on the equities."