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Gold investors flock to gold amid Trump-driven turmoil

Investors looking for a safe haven from the political and economic volatility triggered the new U.S. Administration are increasingly turning to gold Exchange-Traded Funds. This is adding momentum to market's record rally.

Gold prices have been rising steadily since U.S. president Donald Trump assumed office in January. His radical policy changes, such as trade tariffs and comments that he wants to annex Greenland, along with his unconventional diplomatic approach to end the conflict in Ukraine, has led to successive record highs.

Analysts say that the shift in policy has tempted even U.S. Investors who have traditionally preferred equities.

Gold reached its latest record on Friday at $3,004.86 per ounce. This represents a 14% increase since the beginning of 2025. In 2024, it had grown by 27%.

Gold holdings of Europe listed exchange traded funds have increased by 46,7 metric tons (a 3.6% increase) to 1,334.3 tonnes since the beginning of 2025. This is in contrast to 2021-2024, which was marked by large outflows.

As the market continues to move into overbought terrain, further inflows may provide support.

Investors such as real money manager, particularly those in the West, needed to be sufficiently scared by a stock market and growth scare for them to return back into gold. Ole Hansen is the head of commodity strategy for Saxo Bank.

These investors have now returned to gold after leaving it in 2022, when the Federal Reserve started its rate-hiking cycles. But with other markets showing signs of weakness and the possibility of even lower funding rates for the future, the other markets are now showing signs that they will suffer.

Retail investors in the United States are wary about stock markets following Monday's crash, when the benchmark S&P 500 registered its largest drop of this year. Analysts believe that this will increase demand for gold, as it is a safe haven from the turmoil.

Alexander Zumpfe is a precious metals dealer at Heraeus Metals. He says that some U.S. investors are less concerned about global risks because they have more confidence in their own economy.

However, recent inflows to North American gold ETFs suggest that gold is becoming a popular hedge in the U.S.

Gold holdings of ETFs in the United States have increased by 68.1 tons this year, or 4.3%. They now total 1,649.8 tonnes.

EQUITIES LOSS COULD BE GOLDS' GAIN

Hansen, from Saxo, said that Trump's policies had triggered a withdrawal of cash from U.S. stock markets, which attracted investors for many years. Gold could benefit, at least short-term.

Retail investors around the world are eager to get exposure to gold.

Adrian Ash, BullionVault’s head of research, stated that the number of people purchasing gold online for the first time jumped to its highest level since May 2021 in February.

Ash stated that the gold investor demand at BullionVault was higher than customer profit taking by 0.2 tons, which is the highest level since June 2023.

Analysts say that despite all the positive signs for the market, the gold price may not rise, as the signs of an overbought market are evident.

John Reade is a senior market strategist with WGC. He said that for gold to remain above $3,000 an ounce, the demand from retail bars and coins in Europe and North America would have to increase further, and/or the central bank purchases intensify.

After a recent slump, the only thing that has been increasing in Germany is demand for gold bars and coin. (Reporting and editing by Polina Devtt, Veronica Brown, Barbara Lewis and Pratima Dasai)

(source: Reuters)