Business News: Gold ETFs Hit Record Highs in January 2025, Know Potential Reasons

Business News: Gold has performed well in global investment markets at the beginning of 2025. January witnessed an increase in investment demand  both in India and globally. According to the World Gold Council's most recent numbers, global gold ETFs had an inflow of $3 billion, resulting in a substantial rise in volume to $34.5 billion. This rapid growth increased gold ETF assets under management (AUM) to a record $294.2 billion, with total holdings of 3,253.3 tons. The key drivers of this demand are the uncertainty surrounding the global trade war and the falling US dollar, which contributed to an 8% increase in gold prices.  

India Holds Strong Position

During January, European markets offered the most support for gold ETFs, with investments totaling $3.4 billion, primarily in the UK and Germany. In contrast, North America experienced a $499 million outflow, indicating the withdrawal of investors. In Asia, India maintained its strong trend, with a significant influx of $400 million (Rs 2,950 Cr). This trend is mostly driven by weakening equity markets and rising global instability, which has led Indian investors to see gold as a safe-haven asset. However, China’s outflow was $399.1 million. Notably, 2024 was a great year for gold, with the first worldwide ETF inflow in three years, totaling $3.4 billion, but total holdings fell to a five-year low of 3,218.8 tons.