How are energy investors positioned?
Investing.com-- Physically-backed gold exchange traded funds saw their highest level of inflows in three years in the first quarter of 2025, data from the World Gold Council showed on Tuesday, as risk appetite was decimated by heightened fears of a U.S.-led trade war.
Gold ETFs saw inflows of about 226.5 tonnes of gold in the three months to March 31, their highest inflow since Q1 2022, where the onset of the Russia-Ukraine war saw gold ETFs clock inflows of 271.7 tonnes.
But in dollar terms, ETF inflows surged to $21.1 billion in Q1- their highest level since the second quarter of 2020, when markets were battered by the COVID-19 pandemic.
The jump in ETF inflows saw gold prices soar to record highs of over $3,150 an ounce in recent weeks. North American buyers were the biggest sources of inflows, followed by Europe and Asia.
Gold demand was boosted chiefly by heightened concerns over the impact of U.S. President Donald Trump imposing steep trade tariffs on several major global economies.
Trump’s reciprocal tariffs, which were unveiled last week, are set to take effect from April 9.
The tariffs drew ire and retaliation from several major economies, particularly China, which warned of an escalating trade war with Washington. Trump responded to this by threatening to hike tariffs against China to 104%.
Trump’s tariffs are expected to disrupt global supply chains, while greatly increasing import costs in the U.S., potentially underpinning inflation.
Fears of a U.S. recession also grew rapidly in the face of Trump’s tariffs, driving more demand for safe havens such as gold.