Gold ETFs Shine Bright in April 2025: China Leads Global Inflows Amid Trade Tensions

In April 2025, physically backed gold exchange-traded funds (ETFs) recorded a substantial inflow of 115.3 metric tons, amounting to nearly $11.2 billion (approx. ₹93,600 crore). According to the World Gold Council (WGC), this is the highest monthly inflow since March 2022, when global markets faced shockwaves from the Russia-Ukraine conflict.

This surge has lifted total global gold ETF holdings to 3,560.8 metric tons by the end of April, marking a 3.3% rise and the highest level since August 2022. The all-time high was 3,915 tons, seen in October 2020.

Read More: Best Gold ETFs in India for May 2025: SBI Gold ETF, HDFC Gold ETF, and More Based on 5Y CAGR. 

China Leads the Charge Amid Escalating Trade War

China was at the forefront of this gold rush, with China-listed ETFs accounting for 64.8 metric tons of the April inflow. This movement came as the trade tensions between China and the United States escalated sharply, with both nations imposing retaliatory tariffs.

Investors in China appear to be hedging against potential market disruptions, using gold as a shield against economic uncertainty stemming from the intensifying trade dispute.

U.S. Investors Follow Suit

While China led in volume, U.S.-listed gold ETFs were not far behind, attracting 42.4 metric tons during the same month. For American investors, the shift to gold ETFs signals growing concerns over inflation, monetary policy shifts, and broader geopolitical risks.

The convergence of safe-haven buying from both Asian and Western markets highlights a global trend: investors are increasingly viewing gold as a buffer against volatility.

Gold Prices Fuel ETF Appetite

Gold prices themselves added momentum to this ETF inflow. The precious metal hit a record high of $3,500 per troy ounce in April, marking a 28% year-to-date rise. This sharp price surge not only attracted speculative interest but also reinforced gold’s reputation as a store of value during turbulent times.

Higher prices typically result in increased ETF holdings, as the underlying asset value rises. But in this case, both price and demand rose in tandem, underlining a rare alignment of market psychology and macroeconomic triggers.

Broader Context: Why Gold Is Back in Focus

Several key factors have revived investor interest in gold ETFs in 2025:

• Geopolitical tensions: The tit-for-tat tariff war between China and the U.S. has revived fears of global trade fragmentation.
   
• Macroeconomic uncertainty: Investors are navigating interest rate volatility, central bank actions, and currency fluctuations.
   
• Portfolio diversification: With equities showing signs of fatigue, gold provides balance and perceived security.
   
• Currency hedge: In countries facing depreciating currencies, gold often acts as a wealth preserver.

Conclusion

While still below the pandemic-era peak of 3,915 tons in October 2020, April’s rise suggests that gold ETFs may again approach historic levels if the current macroeconomic climate persists.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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