Global gold ETFs attracted $5.5 billion in August, extending their inflow streak to three months.
| Photo Credit:
istock.com
Investments in physically-backed gold exchange-traded funds (ETFs) were up for the fourth consecutive month in India, while they increased for the third month in a row globally in August, led by Western funds, the World Gold Council (WGC) said in its review.
“Asian flows flipped negative in August, losing $495 million. China lost the most: continued equity strength, with the CSI300 Stock Index jumping 10 per cent in August, kept diverting local investors away from gold. In contrast, India saw its fourth consecutive monthly inflow in August, supported by elevated safe-haven needs amid weak equities as well as ongoing global trade and geopolitical risks,” said the WGC, an organisation of gold producers. Indian ETF investments were, however, insufficient to offset Chinese outflows.
The gold council said gold ETF trading volumes were down across all regions, decreasing 9 per cent month-on-month to $4.5 billion/day. But OTC trading activities rose, reaching $171 billion a day on average in the month, 12 per cent higher than July and above the 2024 average of $128 billion a day.
Second-strongest on record
Global gold ETFs attracted $5.5 billion in August, extending their inflow streak to three months. North American and European funds led global inflows, similar to July. “Nevertheless, the year-to-date inflow of $47 billion reached the second strongest on record after the peak of 2020,” it said.
August inflows and a further rise in the gold price pushed global gold ETFs’ total assets under management (AUM) 5 per cent higher to $407 billion, setting a new record. Holdings increased by 53 tonnes to 3,692 tonnes, the highest since July 2022 and 6 per cent below the record 3,929 tonnes witnessed in the first week of November 2020.
The WGC said North American funds added $4.1 billion in August, the region’s third consecutive monthly inflow. These investments could be attributed to persistent trade risk and broader market uncertainty, the consensus short dollar trade, which reduced the opportunity cost of holding gold, and lower rate expectations as the market digested Powell’s Jackson Hole comments as dovish.
Invetors building haven positions
“The latter was arguably the most important catalyst for the month-end. Outflows that had been seen in the days leading up to Jackson Hole reversed swiftly, as investors anticipated a September rate cut,” it said.
Low-cost gold-backed ETFs, often viewed as a proxy for long-term strategic positioning, are having their best year on record. The council said it considered this to be a signal that — beyond short-term market noise — investors are steadily building haven allocations in response to a backdrop of elevated risks.
European funds also witnessed investments continuing for the fourth month in a row. They added $1.9 billion in August. The UK, Switzerland, and Germany led the charge. In August, the US imposed a surprise 39 per cent tariff on Switzerland, the highest on any developed nation. This sudden and unexpected hit affected the country’s economic prospects, pushed up haven needs among local investors and increased demand for gold, said the WGC.
German inflows might have been supported by higher haven demand as the country’s Q2 GDP growth was lowered further, sparking investor fears of recession. The UK also witnessed strong inflows in the month, likely buoyed by stagflation concerns — the country’s inflation rebounded while the US tariffs and a tax hike on employers, which could also push up prices further — clouded its growth.
Australia, S Africa pare
Flows in other regions were mildly negative, shedding $50 million. Australian inflows were insufficient to offset South African outflows in the month.
Gold market trading volumes remained broadly unchanged in August, averaging $290 billion per day, down two per cent month-on-month. The decline was led by a 17 per cent mont-on-month drop on COMEX and Shanghai Futures Exchange.
Total net longs in COMEX gold futures fell 3.4 per cent during the month, concluding August at 652 tonnes, while money manager net longs rose 3.7 per cent to 461 tonnes. Money managers’ bullish bets rose steeply in early August around the news of US tariffs on Swiss bullion, leading to a surge in the COMEX gold price. Consecutive price rises towards the end of the month saw gold futures traders build up their longs, said the WGC.
Published on September 6, 2025