The big gold selloff in January didn’t seem to deter investment demand. Despite the big correction in the gold price, metal continued to flow into ETFs last month.
ETF gold holdings rose to an all-time high in January, and gold-backed funds continued to add to their assets in February. ETFs added 26 tonnes of gold last month, pushing total holdings to a record of 4,171 tonnes.
Even with the pullback in the gold price, assets under management (AUM) by gold-backed funds also hit a new all-time high of $701 billion.
It was the ninth consecutive month of positive ETF gold flows globally.
North American funds once again led inflows, reporting the addition of 27.9 tonnes of gold valued at $4.7 billion.
It was the ninth month of positive gold flows into North American ETFs. World Gold Council analysts said, “Such a sustained run is notable and shouldn’t be overlooked.”
“Outside of the initial conditions phase, there have only been two other periods in which the region recorded at least nine straight months of inflows – during the Global Financial Crisis (GFC) and the COVID‑19 pandemic. Although these episodes were driven by different dynamics, both were characterized by elevated systemic risk. As a result, diversification into safe‑haven assets remains a consistent theme for investors.”
According to the World Gold Council, the recent pullback in the gold price incentivized new North American investors to enter the gold market.
The WGC pinpointed four factors driving North American gold ETF investment.
- Heightened geopolitical risk, particularly involving Iran.
- A more favorable opportunity cost for holding gold, driven by dollar weakness and lower rates.
- Ongoing trade and policy uncertainty following the Supreme Court’s ruling on tariffs.
- Equity market concern, as software and SaaS-related names continued to weigh on the broader market.
Asian funds reported gold inflows for the sixth straight month, adding 11 tonnes of gold valued at $2.3 billion.
Japanese funds led the way, driven by political uncertainty in early February, coupled with escalating tensions with China and a weakening yen.
Chinese funds reported modest inflows of gold in a month with fewer trading days due to the New Year holiday. Gold’s muted performance in RMB also created headwinds for gold in the Chinese market.
Indian funds also reported healthy inflows of gold, although the pace moderated after record months in December and January. There was an elevated number of redemptions early in the month, driven by profit-taking. World Gold Council analysts said this was offset later in the month, “underscoring sustained interest in gold ETFs.”
Indian investors have historically preferred physical gold, but ETFs have grown in popularity over the last couple of years.
Europe was the only region to report ETF gold outflows, with funds shedding 13 tonnes valued at $1.8 billion. Redemptions were primarily early in the month as the January selloff spilled into February. Flows turned positive later in the month, but couldn’t offset earlier selling.
The UK accounted for the bulk of European redemptions (-$1.9 billion), reflecting the country’s outsized share of the region’s gold ETF market.
WGC analysts said, “As the bulk of outflows on 30 January and 2 February was concentrated in UK‑listed funds – and not tied to a wider regional or country-specific macro event – we do not interpret this divergence as the start of a longer-term structural trend.”
Funds in other regions, including Australia and Africa, reported modest gold inflows of 0.3 tonnes valued at $17 million. Australia drove inflows, which were offset by outflows in South African funds.
ETFs are a convenient way for investors to play the gold market, but owning ETF shares is not the same as holding physical gold.
ETFs are relatively liquid. You can buy or sell an ETF with a couple of mouse clicks. You don’t have to worry about transporting or storing metal. In a nutshell, it allows investors to play the gold market without buying full ounces of metal at the spot price.
Since you are just buying a number in a computer, you can easily trade your ETF shares for another stock or cash whenever you want, even multiple times on the same day. Many speculative investors take advantage of this liquidity.
But while a gold ETF is a convenient way to play the price of gold on the market, you don’t possess any gold. You have paper. And you don’t know for sure that the fund has all the gold either, especially when the fund sees inflows. In such a scenario, there have been difficulties or delays in obtaining physical metal.
Gold Trading Volumes
Unsurprisingly, gold trading volumes dipped from January’s record high in February after the selloff but remain historically elevated.
Trading volume averaged $478 billion per day, down from $623 billion per day the prior month. However, volume was still 32 percent above the 2025 average.
In tonnage terms, the drop was more substantial, falling 26 percent to 2,969 tonnes per day. That was slightly below last year’s average.
According to the World Gold Council, “The month‑on‑month decline largely reflected profit‑taking, lighter Asian participation during the Lunar New Year holiday, and gold trading sideways after recovering most of its early‑month drop.”
Over-the-counter (OTC) volume dipped by about 12 percent month-on-month to $245 billion per day. That was still elevated by historical standards.
COMEX net longs fell 21 percent in February to 504 tonnes. Money manager net longs decreased 18 percent to 311 tonnes, while Other net longs declined 27 percent to 194 tonnes.
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