Gold Volumes Surge

In January, global gold ETFs saw net inflows of $3 billion, raising total assets under management to a record $294 billion, with holdings increasing by 34 tonnes. European ETFs led the surge, adding $3.4 billion, driven by lower bond yields, easing inflation, and political uncertainties in the UK and Germany. Meanwhile, North American funds experienced outflows of $499 million, as investors took profits following record gold prices after President Trump’s inauguration. Asian funds recorded modest inflows of $57 million, mainly from Indian investors shifting to gold amid global uncertainties and weaker domestic equities. Overall, gold trading volumes surged 20%, fueled by increased activity in both over-the-counter and exchange markets.

Fears of potential U.S. tariffs on European goods have created a price disparity between gold in London and New York, prompting major banks like JPMorgan Chase and HSBC to transport large quantities of gold across the Atlantic to capitalize on higher prices in New York. Meanwhile, central banks have continued their gold-buying spree, pushing global reserves to a record 4,974 tonnes in 2024, reinforcing gold’s role as a strategic asset. Analysts, including Goldman Sachs, have revised their forecasts, now predicting gold could reach $3,100 per ounce by year-end, driven by sustained central bank demand and ongoing geopolitical tensions.