Despite record price levels: European gold-backed ETCs lead inflows

It seems the gold price rally might continue in 2025: After an increase of 35 per cent in 2024, the gold price rose by a further 5 per cent from 80.60 to 85 € per gram between the end of 2024 and 23 January 2025. Although it is the highest price ever for the precious metal in the Eurozone, it appears that both US and European investors are undeterred from further expanding their gold allocations by buying gold-backed ETCs and, in the US, exchange-traded gold funds. 

In Europe, gold-backed ETCs recorded twice as many inflows as gold funds in the US

Over the past six months, Europe in particular saw net outflows. According to the latest data from the World Gold Council, the first three weeks of 2025 brought a turnaround, with European ETCs recording the highest inflows in both percentage and total. With net increases of 1.5 per cent and 19.8 tonnes, respectively, holdings expanded twice as steeply as in the US, where gold funds reported increases of 0.6 per cent or 9.8 tonnes for the same period. Asian gold ETFs recorded higher outflows than inflows, leading to a decline in holdings of 2.5 per cent and 5.5 tonnes, respectively. 

British and German gold ETCs lead European inflows

Of the 25.1 tonnes of net inflows into gold holdings managed in ETFs and ETCs worldwide, 11.8 tonnes were attributable to British and 7.1 tonnes to German gold-backed ETCs. Xetra-Gold saw the second-highest net inflows in Europe and the third-highest worldwide. Xetra-Gold holdings had decreased in 2024 due to sales, mainly by institutional investors who took their profits, most likely to invest in fixed-income bonds. Within the first weeks of 2025, however, Xetra-Gold recorded net inflows of 3.1 tonnes – significantly more than most other gold-backed ETCs traded in Europe. This put Xetra-Gold in third place globally, behind the British iShares Physical Gold ETC and the largest exchange-traded gold fund ever, the US SPDR Gold Shares ETF.