The market’s record climb is gaining speed as more investors turn to gold exchange-traded funds in an attempt to protect themselves from the political and economic unrest brought on by the recent U.S. government.
Gold prices have risen to all-time highs since U.S. President Donald Trump took office in January due to his drastic policy changes, which include trade tariffs, remarks that he wants to annex Greenland, and his unorthodox diplomatic strategy to try to resolve the war in Ukraine.
Analysts say that although European investors first dominated the influx of money into gold exchange-traded funds, or baskets of instruments that move like stocks, the policy upheaval has started to entice even American investors who have traditionally preferred stocks.
After rising 27% in 2024, gold reached its most recent high on Friday at $3,004.86 an ounce, up 14% since the beginning of 2025.
According to the World Gold Council (WGC), gold holdings in exchange-traded funds listed in Europe have risen by 46.7 metric tons, or 3.6%, to 1,334.3 tons since the beginning of 2025.
This is in contrast to the 2021–2024 period, which was characterized by significant withdrawals.
Laptops 1000As the market continues to enter overbought territory, more inflows might offer support.
“Real money managers and other investors, particularly those in the West, required a significant enough stock market and growth scare to convince them to return to gold. That’s what we’re witnessing,” stated Ole Hansen, Saxo Bank’s head of commodity strategy.
“Since 2022, when the Federal Reserve began its rate-hiking cycle, these investors left gold… but with the other markets now showing signs of suffering and the potential for even lower funding rates in the future, they have returned.”
Following Monday’s sell-off, when the benchmark S&P 500 index recorded its largest decline of the year, U.S. individual investors have grown cautious about stock markets.
According to analysts, this increases demand for gold as a safe haven against volatility.
“Despite similar global risks, some investors in the U.S. may be less concerned, possibly due to stronger confidence in the domestic economy,” said Alexander Zumpfe, a precious metals trader at Heraeus Metals.
“However, recent inflows into North American gold ETFs indicate that interest in gold as a hedge is also growing in the U.S.”
To date this year, gold holdings in ETFs in the US have increased by 68.1 tons, or 4.3%, to 1,649.8 tons.
GOLD’S GAIN COULD BE EQUITIES’ LOSS
According to Hansen of Saxo, Trump’s policies have caused a pullback from American stocks, which for years drew significant sums of money from investors, and gold may benefit, at least temporarily.
Retail investors worldwide are eager to gain exposure to gold, in addition to the investor-led flow into exchange-traded funds.
According to Adrian Ash, head of research at London-based BullionVault, the number of individuals purchasing gold on the company’s online market for the first time surged in February to the highest level since May 2021.
At BullionVault, investor demand for gold surpassed consumer profit-taking by 0.2 tonnes, the most since June 2023, according to Ash.
Although encouraging for the market, analysts warn that given the indications the market is overbought, none of this could push the price of gold higher.
John Reade, senior market strategist at WGC, stated that in order for gold to remain above the $3,000 per ounce threshold, central bank purchases would need to increase and/or retail bar and coin demand in North America and Europe would need to increase much more.
After a decline in recent years, the desire for actual gold bars and coins is the only thing that has increased in Germany this year.
