If gold flows into ETFs are any indication, U.S. investors are finally jumping on the gold bandwagon.

Last week, 48.8 tonnes of gold flowed into gold-backed funds based in North America. The last time we saw weekly flows at that level was in April 2020, when governments were confining economies during the COVID-19 pandemic.

ike McGlone, senior commodities analyst at Bloomberg Intelligence, noted that total ETF holdings have recovered to the highest level since early 2024.

"It is not surprising to expect a shift toward gold ETF inflows in 2025, especially if there is a small reversal in the rapidly rising U.S. equity market and high interest rates."

Gold inflows to 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 portion 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 bull rally continued in 2025. The price has climbed to over $2,950, breaking several more records along the way.

It is interesting to note that during this bull run there has been a break from traditional market dynamics, with gold rising despite higher interest rates. Normally, a higher interest rate environment creates hurdles for the yellow metal because it is a non-yielding asset.

Gold Newsletter editor Brien Lundin noted earlier this month that gold seems to "want" to move higher.

"A powerful sign of a bull market is when seemingly bearish news or data is interpreted in a bullish way by investors...That's just 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 primarily driven the gold bull market. Until recently, investors in the West, particularly those in the United States, have largely stayed 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 hedge against potential economic disruptions due to tariffs, along with concerns about persistent price inflation and the growing expectation 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 commodity prices around the world rise. In addition, 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, which will increase gold's attractiveness to investors."

Some analysts believe that with the rapid rise, gold is about to undergo a correction. Trade Nation's senior market analyst said he believes gold is overbought according to 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