Month: April 2025

By Neils Christensen – 4-10-2025

Growing fears that the U.S. economy will see lower growth and higher inflation have finally pushed investors off the sidelines and into gold in a meaningful way, according to the latest research from the World Gold Council.

While the gold market has seen solid inflows into gold-backed exchange-traded funds since the start of the year, the March flow data from the WGC showed a broad-based increase in all major regions.

According to the report, North American-listed funds represented 61% of total inflows, while European markets accounted for about 22% of demand and Asian markets represented 16% of global inflows.

European demand has been the missing piece, underperforming within the gold market for the last few months compared to other regions. However, the WGC noted that these funds are starting to catch up.

“First quarter flows in Europe of US$4.6bn stood out as the strongest quarter since Q1 2020,” the analysts said in the report.

In total, 92 tonnes of gold, valued at $8.6 billion, flowed into global ETFs last month. Meanwhile, 226 tonnes of gold, valued at $21 billion, flowed into ETFs in the first quarter, marking the second highest quarterly level in dollar terms, only behind the second quarter of 2020.

In a regional breakdown, North American ETFs saw their gold holdings increase by 67.4 tonnes last month. The analysts said that demand continues to be driven by the usual factors, including solid momentum coupled with economic chaos and geopolitical uncertainty.

“Additionally, equity pullbacks, due to growth concerns and market liquidity worries amid ongoing quantitative tightening, further pushed up investor demand for safe-haven assets,” the analysts said.

Meanwhile, European-listed funds saw inflows of 13.7 tonnes. The report said the UK, Switzerland, and Germany all saw an increase in gold holdings.

“Although the Bank of England made no changes to its benchmark rate during its March meeting, a cloudy growth outlook further weighed by US tariff concerns, weak stock market performance, and the gold price surge drove demand higher in the UK,” the analysts said. “Equally, despite a jump in the 10-year German Bund yield in early March amid Germany’s massive spending plan, investors in Europe continue to add gold ETFs to their portfolios as the ECB’s March cut encouraged further easing expectations and US tariff risks loom over the growth outlook.”

Finally, Asia-based funds saw inflows of 9.5 tonnes last month.

“China and Japan dominated demand in March, both likely driven by rocketing gold price performances, which dwarfed other assets in the month, and roaring global trade policy risks,” the analysts said.

Although there is a risk that gold’s rally becomes unsustainable, the WGC said the market is backed by solid momentum.

“The extent and speed of gold’s rally have drawn out comparisons to previous peaks. While there are headwinds that the gold market will naturally face in this environment, our analysis also suggests that current macroeconomic conditions are quite different from prior periods when the gold market reached previous highs,” the analysts said in the report.

“The willingness to hold and reluctance to sell – given current extreme policy uncertainty – could generate real momentum,” they added. “By historical standards, the current rally isn’t particularly large or long. And comparing the current rally to the recent 2011 and 2020 peaks highlights that, relatively speaking, fundamentals look more solid.”

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By Neils Christensen – 4-11-2025

The gold market continues to hold near record highs above $3,200 an ounce and is paying little attention to economic data as U.S. wholesale inflation pressures fell sharply last month.

The headline Producer Price Index (PPI) dropped 0.4% in March, following February’s revised 0.1% reading, the U.S. Labor Department announced on Friday. The latest inflation data was significantly cooler than expectations, as economists had predicted a 0.2% increase.

In the last 12 months, headline wholesale inflation increased by 2.7%, well below the consensus of 3.3%.

Core PPI, which strips out volatile food and energy costs, dropped 0.1% last month, in line with February’s 0.1% decline. Economists had forecast a 0.3% increase. Annual core PPI was 3.3%, also well below the consensus expectation of 3.6%.

The report indicated that lower energy prices were the biggest contributing factor behind the drop in producer prices.

Gold is not paying much attention to the forward-looking inflation numbers as the market continues to attract significant safe-haven flows due to the weakening U.S. dollar and elevated bond yields. Spot gold last traded at $3,230.40 an ounce, up nearly 2% on the day.

Some economists note that the inflation data is outdated as the market continues to react to President Donald Trump’s global reciprocal tariffs, which were in place for a week before being halted for 90 days.

“While tariff effects didn’t move the needle for either CPI or PPI in March, there were some signs of them in this release, with the steel mill product PPI jumping by 7.1%. The broader tariffs that took effect last week will start to feed through in the next set of monthly price data, although the recent weakness in markets and evidence of some economic weakness may give the Fed more confidence that these will not have significant second-round effects,” said Stephen Brown, Deputy Chief North America Economist at Capital Economics.

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Gold recovers most of its losses while world markets sink

Gloomy economic growth outlook offers ‘perfect backdrop for further gains in gold’, says BullionVault’s Adrian Ash

By Myra P Saefong

Gold on Thursday was performing its “role as a store of value, providing liquidity in times of trouble,” said Brien Lundin of Gold Newsletter.

Gold fell victim to a selloff in global markets Thursday after President Donald Trump announced wide-ranging tariffs on foreign imports — but it’s still a clear-cut winner to hedge uncertainty, as bargain hunters helped prices for the precious metal recover much of their losses by the day’s settlement.

Gold bulls were looking to “buy the dip amid trade-war chaos,” Jake Hanley, managing director and senior portfolio specialist at Teucrium, told MarketWatch, as gold futures traded well off Thursday’s intraday lows.

Gold futures had dropped by more than $90 an ounce on Comex, from Wednesday’s record-high settlement at $3,166.20 an ounce to their intraday low of $3,073.50 on Thursday, Factset data showed.

“What we’re witnessing today is the kind of asset-wide liquidity event in which everything is sold to raise capital,” said Brien Lundin, editor of Gold Newsletter. “In this kind of liquidity vacuum, babies are thrown out with the bath water across the board.”
— Brien Lundin, editor of Gold Newsletter

“As we’ve seen in previous events like this, gold performs its role as a store of value, providing liquidity in times of trouble,” Lundin told MarketWatch. “It is the figurative piggy bank that gets broken open as traders desperately reach for cash to meet margin calls.”

Following Wednesday’s announcement of Trump’s new plan for U.S. tariffs — which include a universal tax of 10% on imported products from all other countries — U.S. benchmark stock indexes traded broadly lower Thursday, dragging down most markets along with it, including oil prices. Treasurys were an exception, rallying as investors sought safety in the bond market.

Dennis Gartman, retired publisher of the Gartman Letter, said he had sold the “vast majority” of his gold-oriented holdings on Tuesday, ahead of Trump’s announcement. He retained “only my very small holdings of actual, physical gold,” which he’s had for nearly 15 years and said he has no intention of selling, given that he owns that bullion at something close to $600 an ounce.

Gartman, who serves as emeritus chairman of the University of Akron Foundation’s endowment investment committee, said he has little intention of getting back into those gold-oriented holdings “at the moment given the confused atmosphere.”

The White House said some goods and economies would be exempted from the reciprocal tariffs, including gold bullion, according to the Wall Street Journal. Concerns that Trump’s tariffs would include gold had contributed to the metal’s rise to record highs. Traders had scrambled to move physical gold to New York from London and took advantage of a big spread between London spot prices and near-term New York futures prices.

Short term, Adrian Ash, director of research at BullionVault, said Trump’s “liberation day” tariffs were proving to be a “buy the rumor, sell the fact” event for gold prices. Gold futures on Comex had touched fresh record intraday highs above $3,200 overnight, before temporarily dipping below $3,100. settled at $3,121.70 an ounce, down $44.50, or 1.4%.

Gold recoups most of its early Thursday lossesSource: FactSet

April 2April 33,0753,1003,1253,1503,175$3,200

“Risk and uncertainty are strategic drivers of gold demand, whether they are prompted by safe-haven conditions or economic conditions that will be impacted by trade wars,” Joe Cavatoni, senior market strategist, Americas, at the World Gold Council, told MarketWatch. Gold remains “top of mind as a global asset, driven by the need for the right kind of diversification to a portfolio — one that offsets risk [and] volatility, and provides returns.”

Still, for now, the obvious move for traders is out of risk assets and into U.S. Treasurys “as traders seek to shore up liquidity and seek safety,” said Teucrium’s Hanley.

“No one can know for certain who the winners and losers will be” following the implementation of Trump’s tariffs, he said. It will all depend on trade negotiations, but “gold is likely to benefit from the ongoing uncertainty.”

Thursday’s low may actually be the “bargain” price level investors were looking for, as gold clawed back much of the session’s decline, Hanley noted, but “round-number support levels” include $3,000 and $2,800.

“If gold prices fall back to these levels and hold, it will signal that investors see value at those prices,” he said.

Longer term, BullionVault’s Ash said he believes the reasons behind gold’s “stellar start to 2025 are only stronger now that Trump has announced his tariffs.

“Weaker trade, higher input costs and shrinking margins are badly hurting the stock market, while geopolitical mistrust is deepening,” he said. “Such a gloomy outlook for economic growth offers the perfect backdrop for further gains in gold.”

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