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Global gold exchange-traded funds (ETFs) witnessed a major resurgence in the first half of 2025, attracting US$38 billion in inflows—the strongest performance for a half-year period since 2020.
By Ryan Chigoche
The surge, driven by heightened geopolitical tensions and rising gold prices, reflects a renewed investor appetite for safe-haven assets, according to the World Gold Council (WGC).
The increased demand propelled total assets under management (AUM) in gold ETFs to a record US$383 billion, a 41% rise compared to the previous period.
Global holdings also grew significantly by 397 tonnes, reaching 3,616 tonnes—the highest level since August 2022.
ETFs are investment funds traded on stock exchanges, allowing investors to gain exposure to a diversified asset like gold without physically owning it.
Their accessibility and liquidity have made them increasingly attractive in times of financial and geopolitical uncertainty. These gains underscore a broader shift toward gold in the face of global economic and political instability.
North America, Europe, and Asia Fuel Global Momentum
North America dominated the inflows, contributing over half of the global total with US$21 billion in H1. June alone accounted for US$4.8 billion—its best monthly performance since March.
Key drivers included safe-haven demand linked to the Israel-Iran conflict, a weaker U.S. dollar, and declining U.S. Treasury yields. Despite the Federal Reserve maintaining its policy rate, markets priced in multiple rate cuts over the remainder of 2025 and into 2026, which further boosted the metal’s appeal.
Europe followed with US$6 billion in inflows, reversing a trend of steady outflows since the second half of 2022.
A notable US$2 billion flowed into European funds in June, led by the UK. The Bank of England’s dovish tone, combined with sluggish economic growth, rising geopolitical risk, and cooling inflation, provided a favourable environment for gold allocations. Meanwhile, the European Central Bank’s latest rate cuts added further support.
Asia recorded a historic US$11 billion in inflows during the same period, accounting for 28% of the global total despite representing just 9% of AUM.
India led the region in June amid escalating tensions in the Middle East.
Japan continued its upward momentum with nine consecutive months of inflows, totalling US$1 billion in H1.
China also played a major role, contributing US$8.8 billion, as trade tensions with the U.S., domestic slowdown fears, and a rising local gold price drove investor interest.
Africa’s Uptake Remains Muted
While major global markets capitalised on the gold rush, Africa lagged well behind. The continent, largely through South African funds, posted inflows of just US$661 million in the first half of 2025. Only US$148 million came in during June, highlighting Africa’s limited share in the global ETF momentum.
Several headwinds continue to limit African participation. Economic constraints—such as depreciating local currencies, subdued growth, and constrained investor liquidity—remain key barriers.
These challenges have discouraged broader gold ETF adoption, especially when compared to the enthusiasm seen in Asia, where inflation and global trade fears spurred aggressive buying.
In addition to economic factors, the continent’s ETF infrastructure is still underdeveloped.
Limited product diversity, restricted access for retail and institutional investors, and low market awareness have hindered growth.
Despite global tensions that typically favour gold, African investors appeared less reactive, likely due to competing domestic priorities and lower ETF penetration across the region.
Positive Turnaround in June as Global Flows Rise
The month of June marked a significant shift, with inflows turning positive across all major regions.
The rebound was driven by strong investor demand and rising gold prices, pushing global AUM to new heights.
Notably, gold market liquidity soared to US$329 billion in average daily volume during H1 2025—the highest level recorded since 2018.
ETFs remain attractive for their simplicity and flexibility, offering investors exposure to commodities like gold through stock exchange-listed shares that can be traded in real time.
Australia and Smaller Markets Show Modest Participation
Outside the major ETF regions, countries like Australia and South Africa added a combined US$148 million in June, with total H1 inflows reaching US$661 million.
Australia’s gold ETFs reached record-high holdings and AUM by month-end, reflecting a gradual rise in regional appetite for gold investments.
Although these contributions were relatively small compared to global totals, they highlight a growing interest in gold ETFs across broader markets beyond the usual heavyweights.
The first half of 2025 reaffirmed gold’s status as a key safe-haven asset amid global turmoil. With North America, Europe, and Asia leading the surge in ETF inflows, Africa’s limited participation stood out as a missed opportunity. To close this gap, the continent will need to strengthen its financial infrastructure, expand product access, and cultivate greater investor awareness.
Until those developments materialise, Africa risks remaining on the margins of one of the most significant gold investment waves in recent years.
