Physically-backed gold exchange traded funds (ETFs) recorded their highest inflows in three years during Q1 2025, driven by escalating fears of a U.S.-led trade war. According to data from the World Gold Council, gold ETFs attracted 226.5 tonnes in the first quarter, the strongest inflow since Q1 2022, when the Russia-Ukraine conflict pushed inflows to 271.7 tonnes.
In dollar terms, inflows surged to $21.1 billion—the highest level since Q2 2020, when COVID-19 turmoil rocked global markets. This surge in investment demand helped propel gold prices to all-time highs, topping $3,150 per ounce in recent weeks.
North America led the buying spree, followed by Europe and Asia. The renewed interest in gold is largely attributed to mounting investor anxiety over U.S. President Donald Trump’s aggressive trade policies. Last week, Trump unveiled sweeping reciprocal tariffs targeting major global economies, set to take effect on April 9.
China, among the primary targets, warned of retaliatory measures, raising the specter of an all-out trade war. In response, Trump threatened further tariff hikes on Chinese goods, potentially up to 104%, intensifying fears over global economic fallout.
Analysts warn the tariffs could severely disrupt global supply chains, spike import costs in the U.S., and stoke inflation. Coupled with rising recession concerns, this has driven investors to seek safe-haven assets like gold.
As geopolitical tensions and economic risks escalate, the demand for gold ETFs is expected to remain strong. With inflation fears and market uncertainty mounting, gold continues to shine as a preferred hedge for global investors.


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