Gold ETF Inflows Rebound in 2024: A Bullish Signal for Gold Prices

The global gold ETF market has seen a significant shift in momentum throughout 2024, signaling a potential bullish trend for gold prices as we move into 2025. After years of steady outflows, a reversal in ETF activity could be the catalyst for gold’s price rally. Here’s a closer look at these key developments and what they mean for investors.

The 2024 Shift: Prolonged Outflows Reversed

From late 2020 to mid-2024, gold ETFs experienced cumulative outflows of approximately 930 tonnes. However, a notable reversal began in the second half of 2024, with global gold ETF inflows turning positive. Between June and October 2024 alone, nearly 100 tonnes of gold were added to global ETFs—marking the longest streak of sustained buying since 2020.

Although November and December saw some seasonal outflows, often expected during U.S. election years, these withdrawals were modest compared to prior years. In a bullish twist, December 2024 ended on a positive note, driven by strong inflows across Asia and Europe.

What’s Driving ETF Demand and Market Sentiment?

The revival of gold ETF inflows signals a shift in market dynamics. Key factors influencing this turnaround include:

• **Record central bank gold demand** throughout 2024, which bolstered confidence in the yellow metal as a safe haven.
• **Recovering Chinese retail imports** following earlier declines due to pandemic-related slowdowns in economic activity.
• Expectation of **lower U.S. real rates** and reduced Federal Reserve hawkishness, which could further support gold prices.

ETF demand plays a critical role in shaping sentiment in the gold market. As institutional investors allocate more capital toward gold ETFs, other market participants may adjust their strategies. This often results in higher gold prices to balance physical and speculative demand.

How High Can Gold Prices Go? The 2025 Projection

The continued or accelerated pace of gold ETF buying in 2025 is expected to have upward pressure on gold prices. Analysts project that if these trends persist, we could see gold prices climb toward $3,100/oz, breaking previous highs.

This outlook is underpinned by additional market factors, including:

• Strong institutional interest in diversifying portfolios during economic uncertainties.
• Concerns about the long-term stability of fiat currencies, further driving gold demand.

Bottom Line: 2024’s Turnaround Sets the Stage

The second half of 2024 represents a key turning point for gold ETFs, and the outlook for 2025 remains promising. With sustained ETF demand, record central bank purchases, recovering consumer markets in Asia, and potential policy shifts in the U.S., gold investors have reasons to remain optimistic.

Investors looking to capitalize on the gold rally should monitor ETF flows closely. These trends not only shape market sentiment but also set the stage for the next major price movements in the gold market.