Amid political and economic volatility following the new US administration, investors are rushing to gold Exchange-Traded Funds (ETFs), fueling gold’s record-breaking rally. Since US President Donald Trump took office in January, his radical policy shifts, including trade tariffs, remarks about annexing Greenland, and unconventional diplomacy on the Ukraine war, have driven gold prices to all-time highs.

Gold Hits Record High Amid Market Uncertainty

On Friday, gold reached a new record of $3,004.86 per ounce, marking a 14% increase since the start of 2025. This follows an impressive 27% growth in 2024, solidifying gold’s role as a safe-haven asset.

Why Are Investors Turning to Gold?

Political instability in the US
Stock market volatility
Concerns over future Federal Reserve interest rate policies
Increased demand from both institutional and retail investors

Initially, the gold ETF surge was driven by European investors, but analysts now report that US investors—traditionally equity-focused—are also moving into gold.

“Investors in the West needed a stock market scare big enough to push them back into gold. That’s what we’re seeing,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Gold ETF Holdings Surge in Europe and the US

Europe:

• Gold holdings in Europe-listed ETFs have increased by 46.7 metric tonnes (+3.6%) to 1,334.3 tonnes since the start of 2025.
• This marks a sharp reversal from 2021-2024, which saw major outflows from gold.

United States:

• US-listed gold ETFs have added 68.1 tonnes (+4.3%), bringing total holdings to 1,649.8 tonnes in 2025.
• Monday’s stock market sell-off, where the S&P 500 suffered its biggest drop this year, has accelerated the shift toward gold.

“While US investors may feel less concerned due to confidence in the domestic economy, the recent surge in North American gold ETFs shows growing demand for gold as a hedge,” said Alexander Zumpfe, a precious metals trader at Heraeus Metals.

Equities’ Loss Could Be Gold’s Gain

Trump’s policies have triggered a retreat from US stocks, which for years have attracted massive investor cash inflows. Now, gold could emerge as a major beneficiary—at least in the short term.

Growing Retail Demand for Gold

BullionVault, an online precious metals market, reported a surge in first-time gold buyers in February, the highest since May 2021.
Gold investor demand at BullionVault exceeded customer profit-taking by 0.2 tonnes, the highest since June 2023.

“Retail investors worldwide are hungry for gold exposure,” said Adrian Ash, head of research at BullionVault.

Will Gold Stay Above $3,000 Per Ounce?

While gold’s rally is strong, some analysts warn that the market is overbought.

“To maintain levels above $3,000 per ounce, gold needs increased retail bar and coin demand in Europe and North America, or further central bank buying,” said John Reade, senior market strategist at the World Gold Council (WGC).

So far, physical gold demand is rising only in Germany, following years of decline. Whether the global demand for bars and coins picks up remains to be seen.

Bottom Line: Gold continues to surge as investors seek refuge from uncertainty, but whether it can sustain its record highs will depend on retail demand and central bank activity.