Gold prices have increased over 16% this year, driven by heightened demand for safe-haven assets amid escalating trade tensions. In the latest trading session, exchange-traded funds (ETFs) added 23 tonnes of gold, marking the highest one-day rise since 2022.
In the first quarter of 2025, gold-backed ETFs experienced net inflows of 155 tonnes, reaching levels not seen since September 2023. However, total holdings remain below the peak of 2020, despite previous outflows and a 27% rise in gold prices during the past year.
Investor Sentiment And Gold Demand
What we are seeing is a strong push towards gold as investors seek refuge from global uncertainties, and this is clearly reflected in the considerable addition of holdings to exchange-traded funds. The 16% rise in gold prices this year is not an isolated event but rather a symptom of ongoing concerns around economic conditions and trade conflicts. The fact that ETFs have seen their largest daily inflow since 2022 suggests growing unease in the wider market, prompting collective movement towards assets perceived as more stable.
The net increase of 155 tonnes in gold-backed ETFs during the first quarter shows a pattern of accumulation that has not been present since late 2023. However, while current inflows are impressive, total holdings have not yet returned to their peak from 2020. This means that despite the strong trend of buying in recent months, there is still room for further shifts if conditions continue to push investors towards safety.
For those trading derivatives, this movement in gold should not be overlooked. A 27% increase in the price of the metal over the past year provides a clear indication of steady bullish momentum. The fact that ETFs are now seeing fresh demand could reinforce this trajectory, encouraging further capital to flow into gold markets. Timing positions correctly amid such movements will require careful attention to fund activity, broader market concerns, and shifts in sentiment that could drive even more investors towards protective assets.
Market Trends And Future Outlook
The coming weeks will be telling. If ETF inflows maintain their pace, price support could strengthen further. However, if we begin to see withdrawals or a slowdown in buying, it may indicate a shift in sentiment that traders will need to be prepared for. Each of these factors will play a role in shaping opportunities, particularly for those engaging with leveraged positions where timing adjustments are even more sensitive. Trading gold in the current environment means keeping a close watch on both these flows and the global developments that are fuelling them.
