February in review 

Global physically-backed gold ETFs1 saw significant inflows in February totaling  US$9.4bn, the strongest since March 2022. North American flows  flipped positive following two consecutive monthly outflows, recording one of its  strongest months on record. Asian demand was also strong while European  inflows narrowed. We have now seen three consecutive months of strong global  inflows which, combined an upward trending gold price, have lifted total assets  under management (AUM) to US$306bn, another month-end peak. Meanwhile,  holdings rose to 3,353t, the highest month-end level since July 2023.

Highlights

• Global gold ETFs saw continued  inflows during February as  holdings across all regions grew.
• The third consecutive monthly inflows lifted global gold ETFs’ total  AUM and collective holdings by  4.1% and 3.1% respectively in the  month.
• Global gold trading volumes kept  rising: OTC markets led the charge.

Regional overview  

North American demand surged in February, adding  US$6.8bn. This was the largest single month inflow for the  region since July 2020 and the strongest February ever. As  physical shipments into COMEX vaults from London and  other markets made headlines, the positive gold market momentum also benefited North American gold ETFs.  

But there were other important contributors. For instance,  US Treasury rates trended down with various economic  signals flashing red.³ Lower yields, alongside a weaker dollar,  boded well for the gold price during most of the month – in  fact, it reached nine new record highs in February before  moving lower in the latter half.⁴ We believe reduced opportunity costs and a record-shattering gold price were  key in attracting inflows. Moreover, a pullback in equity  markets and fears of stagflation were also likely positive  drivers of demand. Lastly, we have observed significant inflows triggered by gold ETFs’ options expiry, signalling  further bullish sentiment from investors.  

While we would not be surprised to see a slowdown in  momentum, ongoing recession concerns and policy  uncertainties – geopolitical and economic – will likely  continue to provide a supportive floor for demand. 

Gold trading volumes rise Trading activities across global gold markets increased in  February, ending the month at roughly US$300bn/day on  average. OTC trading, dominated by the LBMA, rose further, as dealers moved gold in response to the US tariff concerns.  Gold futures trading volumes at COMEX were down while  Shanghai Futures Exchange saw a sizable increase, given the  strong local gold price performance. Additionally, gold ETF  trading activities also rose, led by North America.