Global physically backed gold exchange-traded funds (ETFs) recorded inflows of $18 billion in August, marking the second-largest monthly gain ever, the World Gold Council reported. Total gold holdings by these funds increased by 121 tonnes to reach a new record of 4,189 tonnes. The value of assets held by gold ETFs also jumped 16%, climbing to $615 billion.
North America and Europe lead ETF inflows
The surge in gold investment was largely driven by funds based in North America and Europe. North American ETFs attracted $7.7 billion, while European-listed funds reported a record monthly addition of $7.9 billion. Asian gold ETFs contributed a further $2 billion to the global total.
This wave of institutional demand helped reverse earlier outflows seen during the year, lifting total global ETF gold holdings above all previous historical highs.
| Region | August Inflow |
|---|---|
| North America | $7.7 billion |
| Europe | $7.9 billion |
| Asia | $2 billion |
Gold price sees major gain
The strong flows into gold-backed ETFs coincided with a 13% monthly rally in the price of gold, the sharpest increase since January. Analysts attributed this to renewed investor demand amid growing concerns about U.S. debt levels and turbulence in the Treasury market, which boosted gold’s appeal as a safe-haven asset.
The World Gold Council highlighted that upward gold momentum, rising fears over U.S. debt, and pressures in the Treasury market all supported heightened ETF inflows in August.
China’s purchases and shifting demand
The People’s Bank of China significantly expanded its reserves with a 20.2 tonne gold purchase in August—the largest monthly addition since October 2023. This brought China’s official reserves to 2,387 tonnes, marking the twenty-second consecutive month of increases. Gold now accounts for approximately 9% of China’s foreign exchange reserves.
China’s latest buying almost doubled its 10 tonne rise from May and underscores the government’s commitment to diversifying reserves with more gold.
Despite strong central bank buying, data from the Shanghai Gold Exchange showed withdrawals fell 22% compared to July and dropped 27% year over year, totaling 62 tonnes for August. This decrease suggests weaker demand for physical bullion and jewelry purchases across China.
However, Chinese gold ETFs added 11 tonnes during August, raising their holdings to 293 tonnes and highlighting a shift in domestic gold demand towards institutional investors and the central bank.
Mini dictionary: World Gold Council – A market development organization for the gold industry, providing data, analysis, and advocacy to promote gold’s use as an investment.
This divergence signals that gold demand in China is now being driven more by financial institutions and official reserves than by jewelry consumers.
Recent analysis by Coinpaper has noted gold’s growing role as a hedge for investors seeking protection against high government borrowing costs and economic instability.
