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Investors poured billions of dollars into gold exchange-traded funds during January, driven by geopolitical tensions, expectations of a weaker U.S. dollar, and growing anticipation of interest rate cuts. According to LSEG Lipper data, gold and precious metals ETFs attracted $4.39 billion in January, marking their eighth consecutive month of inflows, while gold miner ETFs received $3.62 billion, the highest level recorded since at least 2009.
Cumulatively, these ETFs saw a record $91.86 billion in inflows for 2025, representing more than eight times the total recorded in 2024. The SPDR Gold Shares ETF led the way with $2.58 billion in inflows last month, while SPDR Gold MiniShares Trust and iShares Gold Trust ETFs attracted $1.79 billion and $696 million, respectively.
Recent Volatility Hits Gold Prices
Despite the strong inflows, gold prices have experienced significant volatility in recent days. Prices fell approximately 10 percent over two days after reaching record highs the previous week, according to market reports. The sharp decline was triggered when Kevin Warsh was nominated as the next U.S. Federal Reserve Chair, prompting a broader metals selloff and leading CME Group to raise margin requirements.
However, analysts remain optimistic about the longer-term outlook for gold investments. J.P. Morgan analysts indicated in a note that they expect the rally to continue despite recent turbulence. The firm cited a structural diversification trend and what they described as an entrenched regime favoring real assets over paper assets.
Gold Miner ETFs See Record Demand
The surge in gold miner ETF inflows reflects growing investor confidence in the mining sector. The VanEck Gold Miners ETF received $539 million in net purchases during January. Additionally, the iShares S&P/TSX Global Gold Index ETF and VanEck Junior Gold Miners ETF attracted $312 million and $114 million in inflows, respectively.
This unprecedented demand for both physical gold ETFs and mining sector funds underscores investors’ desire to diversify portfolios amid ongoing economic uncertainty. The simultaneous strength in both categories suggests broad-based confidence in gold as a safe-haven asset.
Long-Term Gold Investment Outlook Remains Bullish
Market strategists continue to recommend gold exposure despite short-term price fluctuations. Mark Haefele, chief investment officer at UBS Global Wealth Management, stated that central bank and investor demand for gold is expected to grow further this year. He recommended maintaining a long position in gold with a mid-single-digit allocation in well-diversified portfolios.
Furthermore, UBS forecasts suggest significant upside potential for the precious metal. Haefele noted that while the current elevated premium presents downside risks, gold prices could climb higher than current forecasts to $5,400 per ounce if political or financial risks intensify.
Driving Factors Behind Gold ETF Inflows
Several macroeconomic factors are supporting the continued interest in gold investments. Geopolitical uncertainty remains a primary driver as investors seek safe-haven assets during periods of international tension. Meanwhile, expectations of U.S. interest rate cuts make non-yielding assets like gold more attractive relative to fixed-income investments.
The anticipated weakness in the U.S. dollar also enhances gold’s appeal, as the precious metal typically moves inversely to dollar strength. In contrast to traditional equity markets, which have shown heightened volatility, gold has maintained its status as a portfolio stabilizer.
Market participants will be watching upcoming Federal Reserve policy decisions and geopolitical developments closely, as these factors will likely determine whether the record-breaking inflows into gold and precious metals ETFs continue in the coming months. The trajectory of dollar strength and clarity around interest rate policy remain key uncertainties for investors.
