Demand for gold and related exchange-traded funds surged in January as investors shifted toward perceived safe-haven assets amid geopolitical uncertainty, bets that the dollar will weaken further and rising expectations that U.S. interest rates will be cut.
Data from LSEG Lipper show that exchange-traded funds of gold and other precious metals attracted $4.39 billion in net inflows during January, marking the eighth month in a row of positive flows into that category. ETFs that invest specifically in gold miners drew $3.62 billion, the largest monthly inflow for that segment since at least 2009.
On a cumulative basis, the group of ETFs covering gold and miners took in a record $91.86 billion through 2025 so far - a figure that is more than eight times the amount those funds recorded in 2024.
Despite the broad movement into gold-related funds, the metal itself experienced a sharp pullback. Gold prices fell by roughly 10% over two days after having reached record highs the prior week. The decline followed a spike in volatility that prompted CME Group to raise margin requirements, a move that came after a sharp metals selloff triggered by the nomination of Kevin Warsh as the next U.S. Federal Reserve Chair.
Still, some market strategists remain optimistic on the medium-term outlook for bullion. Analysts at J.P. Morgan said they expect the rally to hold up over a longer horizon despite recent swings. "We remain firmly bullishly convicted in gold over the medium-term on the back of a clean, structural, continued diversification trend that has further to run amid a still well-entrenched regime of real asset outperformance vs paper assets," they wrote in a note.
At the fund level, flows were concentrated in several large products. The SPDR Gold Shares ETF received $2.58 billion in January. Other pooled funds focused on the metal also drew meaningful purchases: the SPDR Gold MiniShares Trust attracted $1.79 billion and the iShares Gold Trust took in $696 million.
Investors also targeted equity products that provide exposure to mining companies. The VanEck Gold Miners ETF recorded $539 million of inflows. The iShares S&P/TSX Global Gold Index ETF and the VanEck Junior Gold Miners ETF saw net purchases of $312 million and $114 million, respectively.
Wealth management executives see further demand ahead. Mark Haefele, chief investment officer at UBS Global Wealth Management, said central bank and investor demand for gold is expected to grow further this year, and that his firm remains long gold. He said there is value in maintaining a mid-single-digit allocation to the metal within a well-diversified portfolio. He also cautioned that downside risks exist given the current elevated premium, while noting that the gold price could rise beyond UBS's forecast to USD 5,400/oz if political or financial risks increase.
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