Western investors are piling into gold market after three-year hiatus
Western investors are finally back in the gold market after being largely absent for the past three years. This time, they’re coming in force with big purchases of bullion-backed exchange-traded products.
North American and European investors bought about 240 tons of gold in ETFs as of mid-April, according to data from the World Gold Council. That’s more than half the 441 tons they sold in the past three years.
The “swing from providing supply to absorbing supply — that’s a very large change,” Aakash Doshi, global head of gold strategy at State Street Global Advisors, said in an interview. “That has a high impact on prices, whereas central banks and China may continue to buy but that change isn’t going to be as large as the ETF buyer.”
The precious metal surged past $3 500 for the first time early Tuesday as US President Donald Trump’s criticisms of Federal Reserve Chair Jerome Powell rattled markets and triggered a flight to haven assets including gold.
Doshi predicts bullion will reach $5 000 over the longer term.
SPDR Gold Shares, the world’s largest gold-backed ETF, has seen $8.65-billion of net inflows as of Monday, with the majority of the inflows coming from institutional investors increasing allocations to gold as an equity-overlay hedge, economic-portfolio hedge and forex and rates hedge, according to Doshi.
Gold has climbed roughly 30% this year, already surpassing the 27% price increase achieved in 2024. The precious metal’s ferocious run started last year, helped by large purchases from central banks as they sought to diversify foreign-exchange holdings beyond the US dollar and insulate themselves from the threat of sanctions.
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