In recent years, demand from Asia has already dominated the physical gold market, and now, according to the World Gold Council, this dominance extends to the market for gold investment products. The demand for exchange-traded funds (ETFs) backed by physical gold is stronger there than in any other region of the world, according to the gold industry’s trade association.
According to the WGC report, holdings in Gold ETFs increased by 115 tons worth $11 billion to a total of 3,561 tons. This represents the fifth consecutive month of net inflows, reaching the highest level since August 2022. According to WGC experts, holdings are still 10% below the record highs of 2020.
Asian inflows account for 65% of the total inflows into Gold ETFs worldwide, representing the strongest month of all time. Demand from North America is also considerable, while fund flows in Europe have recently been slightly declining.
Gold ETFs traded in Asia increased by 69.6 tons worth $7.31 billion last month. The majority of demand comes from China, with holdings recording inflows for the third consecutive month. The ongoing trade conflict with the US, although there was some easing in May, has fueled fears of weaker growth, increasing stock market volatility, and rising devaluation of the domestic currency, thus contributing to gold demand, according to the WGC. For this reason, Gold ETF demand in Japan has also continued to rise, now for the seventh consecutive month.
North America with Second Strongest April Since Records Began
Gold ETFs traded in North America recorded inflows of 44.2 tons worth $1.83 billion in April, according to the WGC. The experts say that while investment demand from North America can be volatile due to high gold prices, a solid upward trend remains intact. Although inflows weakened in February and March, the past month was the second strongest April since records began. Short-term fluctuations in demand are expected, but given the anticipated ongoing market volatility due to unclear developments in US trade policy and inflation concerns, inflows into gold investments should receive medium- and long-term support.
