Traders are pouring into gold ETFs at record pace as trade and inflation worries grow
There’s a rush for gold happening on Wall Street, with investors flocking into the precious metal at a pace never before seen. Gold exchange-traded funds saw record high inflows last week — worth about $4.5 billion and led by the SPDR Gold Shares ETF (GLD) — with around half of that inflow occurring during Friday’s stock market sell-off , according to recent JPMorgan data. Those moves come as gold prices are at all-time highs in early 2025, boosted by trade uncertainty and inflation concerns. The Trump administration put tariffs on imports from Canada and Mexico earlier this month, then quickly placed a 30-day moratorium on them. The White House also imposed levies on Chinese goods. Last week, the University of Michigan’s consumer sentiment report showed inflation expectations for the coming year increased sharply. “Gold basically thrives on uncertainty and we have had an awful lot of that,” said George Milling-Stanley, chief gold strategist at State Street Global Advisors and the founder of GLD, the first ETF to track the precious metal. “I think that most of the action over the past week or so, which was pretty spectacular, was prompted by increasing concerns over the outlook for the U.S. economy.” Gold futures are up more than 10% for the year and hit a record, far outpacing the S & P 500’s 2% advance in that time. On Wednesday, they traded around $2,920 per ounce. GLD is also up around 10% in 2025. @GC.1 GLD,.SPX YTD mountain Gold, GLD and SPX year to date Milling-Stanley said the influx into gold has occurred as appetite for risk grew dramatically during 2024 and pushed investors to hedge against those positions — particularly during a year that saw the rise of flashy artificial intelligence plays and volatile assets such as bitcoin. Hedge funds and individual investors have demonstrated increased interest in GLD, he added, noting that “FOMO,” or fear of missing out, could be the action driving individuals to rake up shares of gold. Gold’s recent highs “suggest that that risk-off may be becoming the new flavor of the month,” Milling-Stanley added. If that risk-averse sentiment continues, the strategist expects the value of the precious metal could keep increasing. The rally in gold has continued this year after the world’s demand for the precious metal hit a record high in 2024, driven by central bank purchases and investment demand, according to the World Gold Council. This gold rush has offered competitive gains to more volatile assets such as U.S. equities and bonds, Jurrien Timmer, director of global macro at Fidelity Investments, said. “Gold has been a big winner for the past few years, keeping up and even beating equities. It’s quite a performance for an asset that often gets lamented for not providing a cash flow,” Timmer told CNBC, noting that gold has produced almost the same return as the S & P 500 since 2020, while having lower volatility. The value of gold has also grown more than the value of bonds since 1970, he added. “Gold often doesn’t work, but when it does, it tends to be when bonds are impaired. To me, that’s the role of gold: a hedge against bonds.” Looking ahead, there may be further gains ahead, though on a more limited basis. Milling-Stanley pointed out that gold hit $2,000 per ounce just one year ago — roughly five years after the asset broke above the $1,000 resistance level. “Let’s not get our hopes up too quickly for breaching the overhead resistance at $3,000,” he said. “I believe it will happen. I just don’t know when it’s going to happen.” To be sure, a move above the $3,000 mark could spark even more inflows into ETFs like GLD.
