Investors are piling into gold exchange-traded funds (ETFs) at the fastest pace in three years as the price of bullion hits a record high.
Physically backed gold ETFs have registered their biggest weekly inflow since March 2022, according to data from the World Gold Council. The SPDR Gold Trust ETF (GLD), which is the oldest and largest of the gold ETFs, has seen a particularly big spike in investor capital in recent weeks.
Over the past five trading sessions, gold ETFs saw an inflow of $5 billion, equal to 52.4 metric tons of the precious metal, said the World Gold Council. That was the largest amount of capital allocated to gold ETFs since the first week of March 2022, which followed Russia’s invasion of Ukraine.
Flight to Safety
The flood of capital into gold ETFs comes as concerns grow about the global economy and geopolitical stability as U.S. President Donald Trump implements his domestic and foreign policies. Recent economic data has pointed to a slowdown in the U.S. economy and Trump’s constant threats of trade tariffs have investors on edge, gyrating stock markets around the world.
Gold ETFs store bullion for investors and account for a significant amount of investment demand for the precious metal. Gold is widely viewed as a safe haven asset and its price tends to rise during times of uncertainty. The price of gold hit a record high of $2,956.15 per ounce on Feb. 24. Many Wall Street analysts expect gold’s price to surpass $3,000 an ounce this year.
Is the SPDR Gold Shares ETF a Buy?
The SPDR Gold Shares ETF tracks the price movements of bullion. As noted in the chart below, the ETF has gained 11.65% over the past three months, mirroring the price increase in physical gold. The ETF has risen more than the benchmark S&P 500 index that is up 2% year to date.
