Global Physical Gold ETF Holdings Hit Record 4,189 Tons; China Adds 20.2 Tons in August

Global physically backed gold ETFs drew $18 billion in net inflows in August, the second-largest monthly intake on record, World Gold Council data showed. Total holdings increased by 121 tonnes to a new peak of 4,189 tonnes, while assets under management rose 16% to $615 billion. China also stepped up official buying. The People's Bank of China added 20.2 tonnes of gold in August, its biggest monthly purchase since October 2023. The country's official reserves have now risen for 22 consecutive months to 2,387 tonnes. North America and Europe led the ETF surge. North American gold ETFs attracted $7.7 billion, and Europe-listed funds added $7.9 billion for their strongest month on record. Asian funds contributed another $2 billion, helping lift global ETF holdings above all prior historical highs. The inflows coincided with a 13% jump in the gold price during August, the metal's best month since January. Investors responded to improving price momentum, ongoing concerns about U.S. debt, and signs of stress in the U.S. Treasury market. China's August purchase nearly doubled the 10-tonne increase recorded in May and lifted gold to roughly 9% of the country's foreign-exchange reserves. The buildup comes even as parts of China's physical gold market remain soft. Shanghai Gold Exchange withdrawals fell 22% from the prior month and 27% from a year earlier to 62 tonnes in August, reflecting weaker bullion investment and still-soft jewellery demand. Chinese gold ETFs moved in the opposite direction, adding 11 tonnes and taking holdings to 293 tonnes. The split points to demand increasingly driven by institutional investors and the central bank rather than jewellery buyers. Coinpaper has noted gold's expanding role as a hedge amid high sovereign borrowing costs and broader macro uncertainty.