Indian gold Exchange-Traded Funds witness continuous increase in investments for the fourth consecutive month
In August, gold Exchange-Traded Funds (ETFs) witnessed a significant boost in investments, with Europe leading the charge and North America following closely. This surge in investments is believed to be driven by concerns over stagflation and potential price increases.
The UK, Switzerland, and Germany were the frontrunners in European gold ETF investments last month. Germany's investments might have been fuelled by higher haven demand due to lowered Q2 GDP growth and recession fears. Meanwhile, Swiss investments could have been affected by the US's surprise 39% tariff, which has impacted the country's economic prospects and increased demand for gold.
The strong investment trends continued globally, with total assets under management (AUM) increasing by 5% to $407 billion, setting a new record. Global gold ETFs attracted $5.5 billion in August, marking the third consecutive monthly inflow. Holdings of global gold ETFs also rose by 53 tonnes to 3,692 tonnes.
North America was not far behind, with funds adding $4.1 billion in August, marking the region's third consecutive monthly inflow. Persistent trade risk, broader market uncertainty, the consensus short dollar trade, lower rate expectations, and dovish comments from Powell are some of the factors contributing to investments in North American funds.
However, Asian flows flipped negative in August, losing $495 million. China lost the most in Asian gold ETF investments due to continued equity strength in August. Indian ETF investments were insufficient to offset Chinese outflows.
Trading volumes on COMEX and Shanghai Futures Exchange declined 17% month-on-month in August, averaging $290 billion per day, down 2% compared to the previous month. Total net longs in COMEX gold futures fell 3.4% during August, concluding at 652 tonnes. On a positive note, money manager net longs in COMEX gold futures rose 3.7% to 461 tonnes in August.
Year-to-date inflow of gold ETFs reached the second strongest on record at $47 billion. The leading investors in global gold ETFs in August 2025 were predominantly non-Western countries, notably central banks outside the G7, which have been actively purchasing gold to diversify reserves and reduce dependence on the US dollar amid geopolitical tensions and ongoing de-dollarization efforts.
In summary, August saw a surge in gold ETF investments across global markets, with Europe and North America leading the charge. The trends are expected to continue as investors seek safe-haven assets amid ongoing economic and geopolitical uncertainties.
