Gold ETF erupts with a shocking wave! In September, it broke records in capital inflow, with global investors rushing in

Investment Insights - As of September, with the month not yet over, the three major gold-related exchange-traded funds (ETFs) have attracted over $5 billion, setting a record for the largest monthly inflow in history. The heat of the gold market in 2025 is unstoppable, with prices skyrocketing, increasing by more than 40% in just nine months, marking the most astonishing performance since 1979. The surge in gold prices is not merely an increase but a comprehensive feast of capital. It has attracted not only retail investors but also institutions and large players, with the three major gold-related exchange-traded funds (ETFs) attracting over $5 billion this month, setting a record for the largest monthly inflow in this asset class's history. According to the latest data, the world's largest gold ETF—SPDR Gold Shares (GLD)—saw an inflow of $2.67 billion in a single month, closely followed by iShares Gold Trust (IAU) with $2.13 billion, and even the relatively new Invesco Physical Gold ETC (IPHSF) achieved $425 million. If this momentum continues until the end of the month, it will rewrite the historical high for monthly inflows into gold ETFs. Not only is the short-term performance impressive, but the cumulative inflow into gold ETFs this year is also astonishing. SPDR's GLD fund has absorbed $13.56 billion, nearing its record of $15.3 billion set in 2020; iShares' IAU fund has also seen an inflow of $8.59 billion, approaching historical highs. Even newer funds like Invesco IPHSF and Goldman Sachs Physical Gold ETF (AAAU) have performed strongly, attracting $1.9 billion and $557 million, respectively, reflecting that the popularity of gold ETFs has spread from mainstream products to other targets. From the cumulative data this year, SPDR's GLD has absorbed $13.56 billion in new funds, closing in on the 2020 record of $15.3 billion; iShares' IAU is not far behind, with a cumulative inflow of $8.59 billion, indicating that market confidence in gold continues to rise. Behind this wave of ETF frenzy is the strong rise in gold prices. Gold futures prices have surpassed $3,700 per ounce, making 2025 a bumper year for the precious metals market. However, this surge is not only driven by the enthusiasm of ETF investors; central banks around the world are also quietly contributing to the momentum. Following multiple geopolitical events in 2022, central banks' preference for gold has only increased, with the total amount of gold held by global central banks now surpassing U.S. Treasury bonds. This symbolic shift reflects deepening market concerns about the stability of U.S. finances. According to Bank of America tracking, central bank gold purchases grew by 45% this summer, indicating strong institutional demand. Bank of America commodity strategist Michael Widmer predicts that against the backdrop of stubborn inflationary pressures and employment challenges, gold prices could challenge the $4,000 per ounce mark by 2026 The current inflation rate in the United States remains around 2.9%, but the Federal Reserve's policy focus seems to have shifted from curbing inflation to stabilizing the labor market. Historical data shows that whenever the inflation rate exceeds 2% and interest rates decline, the average annual return on gold can reach 13%, making the current macro environment even more favorable. In addition to inflation and interest rate factors, structural changes in the global monetary system also add to gold's appeal. The total market capitalization of cryptocurrencies has approached 10% of the broad money supply (M1) in the United States, Europe, and China, while stablecoins are gradually becoming the core of digital finance. Although most are backed by U.S. Treasury bonds, the market is beginning to explore the possibility of using gold as collateral. These trends, although still developing, highlight the challenges to the trust in fiat currencies (especially the U.S. dollar as the global reserve currency), thereby enhancing gold's status as a long-term safe-haven asset. With only one quarter left in 2025, gold is highly likely to become the best-performing major asset of the year. Driven by a surge in ETF inflows and robust central bank purchases, the rise of gold prices to $4,000 is no longer a question of "if," but rather an expectation of "when."