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Informist, Wednesday, Jul. 9, 2025

 

MUMBAI – Global gold exchange traded funds saw inflows in June, marking the strongest semi-annual performance since the first half of 2020, the World Gold Council said in a report. All regions saw inflows last month, with North American and European investors leading the charge, it said.

 

During the first half of 2025, global physically backed gold ETFs saw inflows of $38 billion boosted by strong positive flows in June. The total assets under management of global gold exchange-traded funds were at $382.8 billion in June, up 2.4% from May and up 41% since the start of the year, driven by surging gold price and notable inflows. Total assets rose by 74.6 tonnes to 3,615.9 tonnes on month, WGC said.

 

North America accounted for the bulk of inflows and despite a slowing momentum in May and June, Asian investors bought a record amount of gold ETFs during the first half of 2025, contributing an impressive 28% to net global flows with only 9% of the world's total assets under management, the council said. European flows turned positive in the first half of 2025 following non-stop semi-annual losses since 2022, it said.

 

Owing to spiking geopolitical risks amid the Israel-Iran conflict, investor demand for safe-haven assets increased which led to an inflow of $4.8 billion into North American gold ETFs in June, bringing the total inflow in the first half of 2025 to $21 billion. Although it held rates steady in June, the US Federal Reserve continued to express concern about slowing growth and rising inflation. Markets are now pricing in three rate cuts by the end of 2025 and an additional two in 2026, according to the report.

 

"Persistent policy uncertainty and ongoing fiscal concerns are likely to remain an overhang on the market, which in turn could help support gold ETF demand in the near to medium term," WGC said. 

 

In Europe, inflows continued for a second month, adding $2 billion in June, the strongest monthly inflow since January and lifting the regions total inflows in the first half of 2025 to $6 billion. A weaker economic growth, easing inflation and cooling labour market raised investor bets on future rate cuts by the Bank of England. This resulted in local yields declining and increased demand for the safe-haven asset. 

 

Meanwhile, eight rate cuts by the the European Central Bank, uncertainties surrounding growth, and rising geopolitical risks also contributed to gold ETF demand in several major markets, the report said.

 

In Asia, inflows ended at $11 billion till June, which is a record amount for the first half of a year. India recorded the highest inflow in June in Asia, supported by rising geopolitical tension in West Asia. Indian gold exchange-traded funds saw an inflow of 2 tonnes in June. The total assets under management in the country rose to 66.7 tonnes in June from 64.6 tonnes in May.

 

In Japan, inflows were seen for the ninth consecutive month driven by elevated inflationary concern--particularly when the rice price surged, the council said. China only saw mild inflows in June as trade tensions eased and the local gold price moderated. "Nonetheless, China's H1 inflows of $8.8 billion were unprecedented amid spiking trade risks with the US, growth concerns and the surging gold price," according to the report.

 

Meanwhile, Australia and South Africa were also majr contributors in June as well as during the first hals of 2025. Australian gold ETF assets under management and holdings reached respective month-end peaks in June, WGC said.

 

Gold holdings with SPDR Gold Shares, the world's largest gold-backed exchange-traded fund, rose by 22.3 tonnes to 952.2 tonnes in June. The second-largest gold-backed exchange-traded fund, iShares Gold Trust, saw an inflow of 10.1 tonnes, with its holdings at 441.8 tonnes.

 

The daily average trading volume across all gold markets fell 20% on month to $329 billion per day, the highest semi annual value. But in June there was a decline in volumes by 20% due to a short-term equity market rally and fading momentum for gold. Total net long positions on the COMEX declined 23% on month to 586 tonnes in the first half. Money managers reduced their long positions by 28% over the first six months. But during June we saw positions increasing by 11% on month to 406 tonnes supported by consolidation in the gold price, providing investors with a window of opportunity to begin rebuilding positions.

 

At 1159 IST, the August contract of gold on the COMEX was at $3,297.0 per ounce, down 0.6% from the previous close.  End

 

US$1 = INR 85.83

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Taniva Singha Roy

Edited by Akul Nishant Akhoury

 

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