If gold flows into ETFs are any indication, US investors are finally jumping on the gold bandwagon.
Last week, 48.8 tons of gold flowed into North American-based gold-backed funds. The last time we saw weekly flows at that level was in April 2020, when governments were locking down economies during the COVID-19 pandemic.
Mike McGlone, senior commodity analyst at Bloomberg Intelligence, noted that total ETF holdings have rebounded to their highest level since early 2024.
"It's not surprising to expect a shift toward gold ETF inflows in 2025, especially if there is a small reversal in the rapidly rising US stock market and high interest rates.”
Gold inflows into ETFs can have a significant impact on the global gold market by increasing overall demand.
A gold ETF is backed by a trust company that owns the metal it holds and stores the trust. In most cases, investing in an ETF does not entitle you to any amount of physical gold. You own a share of the ETF, not the gold itself.
ETFs are a convenient way for investors to invest in the gold market, but owning ETF shares is not the same as owning physical gold.
Gold bulls are running
After rising 26.5 percent in 2024 and reaching 40 all-time highs, gold's bullish rally continued in 2025. The price has risen to over $2,950, breaking several more records along the way.
It is interesting to note that during this bullish streak, there has been a break from traditional market dynamics, with gold rising despite higher interest rates. Normally, a higher interest rate environment creates obstacles for the yellow metal because it is an asset that does not generate returns.
Gold Newsletter editor Brien Lundin noted earlier this month that gold seems to “want” to rise.
“A powerful sign of a bull market is when seemingly bearish news or data is interpreted bullishly by investors... That's exactly what we're doing now, at a time when not even a strong dollar or rising Treasury yields can slow gold's upward trajectory.”
Demand for gold from central banks and investors in the East has mainly driven the bull market in gold. Until recently, investors in the West, particularly in the US, have largely remained on the sidelines. Many analysts believe that a recovery in Western optimism could trigger the next stage of the bull rally and push gold above $3,000 an ounce.
Chris Mancini, associate portfolio manager of the Gabelli Gold Fund, told Kitco News that Western investors are turning to gold to protect themselves against potential economic disruptions due to tariffs, along with concerns about persistent price inflation and growing expectations that the Federal Reserve will have to try to keep interest rates higher for longer.
“Gold is serving as a hedge against the loss of purchasing power of the dollar and other currencies. Tariffs could accelerate this process as prices for goods rise around the world. Furthermore, if global central banks (including the Federal Reserve) cut interest rates or print money as a way to combat economic weakness, prices are likely to rise, increasing gold's appeal to investors.”
Some analysts believe that, with its rapid rise, gold is poised for a correction. Trade Nation's senior market analyst said he believes gold is overbought based on the daily moving average convergence/divergence (MACD).
However, Mancini said it is important to focus on the long-term trend.
“Gold at $3,000 tells us that investors are realizing that owning a physical asset that can be held has more value in uncertain geopolitical and economic times. It tells us that the state of geopolitics and the global economy is becoming more uncertain."
Mike Maharrey, Money Metals