Gold flows into ETFs flipped positive globally in July. After two consecutive months of outflows, every region reported positive flows of metal into gold-backed funds in July.
With Europe leading the way, gold ETFs reported net gold inflows of 23.5 tonnes in July, valued at $3 billion.
Assets under management (AUM) by gold-backed funds rose 1 percent to $530 billion. ETFs currently hold 4,068 tonnes of the yellow metal.
Year-to-date, ETFs have added a net 39 tonnes of gold to their collective holdings valued at $11 billion.
The World Gold Council pinpointed three factors driving the ETF turnaround in July:
- Diversification amid tech volatility
- Selective bargain hunting as prices fell
- Policy and geopolitical uncertainty, particularly an unclear monetary policy outlook and the ongoing war in Iran
European ETFs reported the second-strongest month of inflows this year in July, adding 17.3 tonnes of gold valued at around $2 billion.
Funds based in the UK and Switzerland led the surge.
According to the World Gold Council, it appears investors in Europe “rebuilt their positions” following a big selloff in June, as lower prices created buying opportunities.
“This mirrors the pattern seen earlier in the year, when European funds led the rebound following March's sharp U.S.-led outflows, suggesting investors were willing to add exposure after periods of market weakness.”
Asian funds reported a 4.8-tonne increase in gold holdings valued at $116 million. Chinese funds led the way with investors seeking a safe haven.
The CSI 300 Stock Index recorded its worst month since January 2016. Meanwhile, falling local yields reduced the opportunity cost of holding gold.
Japanese-listed funds reported outflows as rising local yields diverted investor demand.
Indian funds reported modest inflows of $157 million.
North American funds reported inflows of just 0.3 tonnes valued at $71 million. The World Gold Council called it a “tentative recovery” after two months of significant outflows.
North America remains the only region reporting net gold outflows for the year.Funds in other regions, including Africa and Australia, reported gold inflows of 1 tonne valued at $140 million. ETFs listed in South Africa and Australia led the way.
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 gold's price, 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 it sees inflows. In such a scenario, there have been difficulties or delays in obtaining physical metal.
Trading Volumes
Global market liquidity averaged $356 billion per day in July, down 3.5 percent month-on-month.
Over-the-counter trading volumes also fell, ticking lower by about 3.4 percent to $205 billion per day.
Despite the decline, both LBMA volumes and Shanghai trading activity remained above their 2025 averages.
Total COMEX longs dropped modestly by 4.4 percent to 542 tonnes.
Managed money appears to be rebuilding its position, with longs adding 11 tonnes.
The World Gold Council described the current position as “near neutral.”
“Gold continues to be weighed down by the effects of the war in the Middle East, which has reinforced inflation risks and supported the dollar and yields, adding to the opportunity-cost headwind facing gold.”
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