According to data from the World Gold Council (WGC), physically backed gold exchange-traded funds (ETFs) experienced the highest quarterly inflow in three years during the first quarter of 2025. Investors turned to gold ETFs, which hold physical gold for investors, as a safe haven amidst political and economic uncertainties.

The escalation of a global trade war triggered by U.S. President Donald Trump's announcement of tariffs on most U.S. imports heightened concerns about a recession and caused unease in financial markets worldwide, prompting investors to flock to gold ETFs. The inflow for the first quarter amounted to 226.5 metric tons valued at $21.1 billion, marking the largest inflow since the first quarter of 2022 during the aftermath of Russia's invasion of Ukraine.

By the end of March, total gold ETF holdings increased by 3% to 3,445.3 tons, the highest since May 2023, with a record high of 3,915 tons recorded in October 2020. U.S.-listed funds saw the highest inflow of 133.8 tons in the first quarter, while European-listed funds attracted 54.8 tons.

This surge in interest for gold ETFs in the beginning of 2025 follows a period of net inflows in 2024, reversing a trend of outflows in the past three years due to high interest rates.