Gold ETFs experienced their largest inflow in three years during the first quarter of 2025, according to data from the World Gold Council (WGC). The resurgence in investment interest in gold ETFs is driven by market volatility and concerns over economic stability, prompting investors to seek the traditionally safe-haven asset. State Street Global Advisors’ chief gold strategist George Milling-Stanley recently explained how gold ETFs offer an efficient and cost-effective way to track gold prices without the concerns of storage and security.
“ETFs are essentially physical gold, but the investor doesn’t have to physically possess it,” Milling-Stanley said. “This removes several concerns about custody, storage, and security, making it a highly attractive option for many investors.”
Physical gold, whether in bars or coins purchased from local dealers, typically involves a large markup over the gold’s intrinsic value—sometimes as much as 5%. Investors may also face similar costs when selling, making it necessary for the gold’s value to increase by around 10% just to break even.
In contrast, gold ETFs often have lower trading costs and expense ratios, making them a more cost-effective investment. “The narrow trading costs and relatively low expense ratios of gold ETFs make them a no-brainer for gold investments,” Milling-Stanley concluded. Despite a temporary dip from record highs driven by market pessimism over new tariffs, gold’s safe-haven status remains strong.
Robust demand and central bank support have positioned gold to benefit from trade volatility, macroeconomic concerns, and geopolitical tensions.
Gold ETFs see renewed investor interest
Gold prices surged to new records at the start of the new quarter as a major escalation in U.S. President Donald Trump’s trade tariffs heightened global economic concerns, driving haven demand.
Bullion neared $3,150 an ounce, marking a fourth consecutive day of gains. Conversely, silver has not fared as well, with prices falling by 14.82% this week. ETFs increased their gold holdings by 100,493 troy ounces while reducing their silver holdings by 833,192 troy ounces, indicating a preference shift toward gold as its price remains elevated.
Overall, ETFs have significantly increased their gold holdings by 6.3% this year, reaching the highest level since September 2023. In company news, SSR Mining’s production and cost guidance for 2025 was weaker than expected, partly due to the timing of the close of the Cripple Creek & Victor transaction and ongoing costs at Copler. Equinox announced it is suspending operations at its Los Filos mine in Mexico after its land access agreement with the community of Carrizalillo expired.
Endeavour Silver has entered into a definitive share purchase agreement to acquire all outstanding shares of Compañia Minera Kolpa S.A. and its primary producing asset in Peru, the Huachocolpa Uno Mine, for a total consideration of $145 million. Meanwhile, analysts expect lower gold production and sales for Centerra in 2025, as the company benefited from the sale of in-process inventory in 2024. The recent confirmation of tariffs on U.S. automotive imports is predicted to reduce new vehicle production and sales, negatively impacting U.S. automotive palladium demand this year.
In 2024, the U.S. imported over 8 million new light vehicles.
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