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Global exchange-traded funds (ETFs) backed by physical gold attracted $10 billion in September, marking the third consecutive month of inflows, according to a report by the World Gold Council (WGC).
Fund holdings rose by 67 tonnes over the month, reaching a record 4,256 tonnes. However, the value of assets under management fell by 7% to $574 billion, driven by the decline in the price of gold.
Where Buying Occurred in September
According to WGC data, all regions recorded inflows in September. North American funds attracted nearly $4 billion, the highest amount among all regions; US funds received $3.8 billion, while Canadian funds drew in $206 million.
European ETFs attracted $3.6 billion. UK funds made the largest contribution ($2.2 billion), with notable inflows also seen in funds based in Germany ($698 million) and France ($451 million). Swiss funds recorded a net inflow ($275 million), yet their gold holdings decreased by 1 tonne. The WGC attributes this discrepancy to the structure of funds that hedge against currency risk.
Asian funds attracted $2.3 billion. China accounted for the largest share ($1.6 billion), with inflows also recorded by funds in India ($496 million), Japan, South Korea, and Singapore. Funds in other regions attracted $104 million. Australia accounted for almost the entire amount ($106 million), offsetting a slight outflow from South African funds. Why buying continued
The September inflows occurred during a period unfavorable for gold in the US, the WGC reports. The Federal Reserve raised interest rates by 25 basis points and signaled that further tightening might be ahead. This put upward pressure on Treasury yields and the value of the dollar. According to the WGC, this increased the opportunity cost of holding gold—the income an investor foregoes by investing in the metal rather than interest-bearing assets—thereby weighing on the price.
However, persistent inflation, high energy prices, concerns regarding stock valuations (particularly in AI-related sectors), and heightened bond market volatility likely boosted gold’s appeal as a portfolio diversification tool, the WGC suggests.
"The continued inflows also indicate that some investors viewed the price decline as an opportunity to build or maintain strategic positions rather than reduce their holdings," the report's authors note.
A record-breaking quarter
Overall, global gold ETFs attracted $30.7 billion in the third quarter, marking the largest quarterly inflow on record. Assets under management rose by 9% during the quarter, with holdings increasing by 211 tonnes. The largest inflows were recorded in the US, followed by the UK in second place.
European funds attracted a regional record of $13.6 billion, surpassing their North American counterparts ($11.7 billion). Asian funds received $4.9 billion during the quarter, while funds from other regions attracted a record $476 million.
In total, gold ETFs have attracted $38.5 billion since the beginning of the year, and their holdings have increased by 226 tonnes.