Gold Price Surge Attracts Record $17 Billion into Gold ETFs
Global gold ETFs attracted nearly $17 billion in August, a significant increase from previous months. This surge is part of a broader trend that has seen more than 60% of net capital flows into gold funds since the beginning of the year.
The strong demand for gold ETFs coincided with a sharp rise in spot gold prices, which increased by 9.7% in August, the strongest monthly increase since January. According to State Street's Monthly Gold Monitor, gold prices went from below $4,100 per ounce at the end of July to the $4,650-$4,700 range in August.
Western investors have started returning to gold, with European gold ETFs attracting $7.7 billion in August alone, bringing their total net capital since the beginning of the year to $12.7 billion. North American funds also attracted an additional $7.5 billion in August, narrowing the gap between Asia and Western markets.
State Street believes that the accumulation cycle of gold ETFs started in May 2024 and may continue further, as the current cycle has accumulated about 1,102 tons of gold over 28 months. This is compared to previous cycles, which lasted 51 months and 58 months, accumulating 1,680 tons and 2,327 tons of gold respectively.