Gold Remains Attractive: 5 Factors Boosting Global Demand

In Brief: Inflows into globally gold-backed ETFs in September reached about $10 billion, equal to 67.3 tons of gold. Positive factors for gold include inflation concerns, rising energy prices, bond market volatility, and high valuations of AI-related stocks, which make gold attractive as an asset […]

Inflows into global gold-backed ETFs in September: About $10 billion of capital, equivalent to 67.3 tons of gold, entered global funds.

Positive factors for gold: Inflation concerns, rising energy prices, bond market volatility and high valuations of AI-related companies have strengthened gold's appeal as a safe-haven asset and portfolio diversification tool.

Market Outlook: If bond yields remain high despite reduced expectations for interest rate hikes, government fiscal concerns and bond market risks could continue to support gold demand, according to the World Gold Council.

Gold is facing obstacles such as continued inflationary pressures and rising interest rates, which have led to the growth of bond yields and the strengthening of the US dollar. However, investors still consider gold a valuable asset; As such, inflows into gold-backed exchange-traded funds (ETFs) remained positive throughout September.

In its latest monthly report on ETFs, the World Gold Council (WGC) announced that last month, 67.3 tons of gold worth nearly $10 billion entered global gold funds. According to analysts, September's strong performance made total inflows to these funds reach a record $31 billion in the third quarter; So that the funds accepted in the stock exchanges of Europe and North America had the largest share in attracting capital.

Analysts of this council announced: "In the third quarter, the total assets under management of global gold ETF funds increased by 9 percent, and their total gold reserves increased by 211 tons." At the level of countries, the United States had the largest share in registering the record of capital inflows in the third quarter, and after that, the funds admitted to the British stock exchange showed a remarkable performance. "The UK recorded its best ever seasonal performance and helped Europe achieve the same record regionally."

Meanwhile, gold-backed ETFs in North America experienced seasonal inflows for the first time in 2026; An event that reversed the significant withdrawal of capital from these funds in the first half of the year.

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According to the report of the World Gold Council, the funds admitted to the North American stock exchanges attracted 11.7 billion dollars of capital during the third quarter, which was equivalent to 81.3 tons of gold. This strong seasonal performance was enough to offset the previous losses and brought the total capital inflows since the beginning of the year to 4.1 billion dollars, equivalent to 20.7 tons of gold.

In September alone, ETFs listed on North American exchanges attracted nearly $4 billion, equivalent to 27.7 tons of gold. Almost all of the monthly demand in this region was allocated to US exchange traded funds, which attracted $3.8 billion in capital. In contrast, Canadian exchange-traded funds registered a more limited inflow of $206 million.

"Capital inflows came in September despite challenging domestic conditions for gold," said analysts at the World Gold Council. The US Federal Reserve raised the interest rate by 25 basis points during this month, pointing to the possibility of continued contractionary monetary policies, intensifying upward pressure on US Treasury bond yields and the dollar. These developments increased the opportunity cost of holding gold and put pressure on its price.

"However, continued inflation and high energy prices, concerns about equity valuations - particularly in AI-related sectors - and increased bond market volatility may have strengthened gold's appeal as a portfolio diversification tool," they added. "Continued capital inflows also show that some investors have seen the drop in gold prices as an opportunity to create or maintain their strategic positions, not a reason to reduce the amount of investment in this precious metal."

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Across the Atlantic, gold ETFs in Europe saw inflows of 21.7 tons of gold worth $3.6 billion. The World Gold Council announced that British demand was the largest contributor to the inflow of funds into the region's funds over the past month.

According to the analysts of this council: the continuation of capital inflows to funds admitted to the British stock exchange was particularly significant. These funds registered capital inflows in 12 weeks out of the total of 13 weeks ending on September 25; The most continuous trend since 2022. This reflects continued investor interest, not an episodic reaction to a particular event. Capital inflows in recent weeks have coincided with a modest increase in British government bond maturities; An issue that likely reflects broader investor concerns about inflation uncertainty, government financial stability and government bond market risks. These factors may have strengthened the attractiveness of gold as a tool for portfolio diversification.

Meanwhile, demand from Asia, which has been one of the gold market's strengths throughout 2026, rose for the third month in a row. Investment demand for gold-backed ETFs was mainly driven by China; While India, Japan, South Korea and Singapore also recorded capital inflows during this month. This trend shows the expansion of demand throughout the Asian region.

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"Despite the drop in gold prices, Chinese funds continued to attract capital," said analysts at the World Gold Council. This trend occurred as China's domestic stock market weakened again and government bond yields fell; Both factors increased the relative attractiveness of gold. Indian funds also continued to attract capital; A trend that was probably influenced by the decline of the domestic stock market, opportunistic buying at the time of falling prices and increased demand for diversification of the investment portfolio.

In the future, analysts of the World Gold Council believe that bond yields can still play an important role in determining the trend of the gold market. The yield on the 10-year US Treasury bond is still significantly above 5%; Meanwhile, the markets have considered only a small possibility of an interest rate increase in the rest of this month.

Analysts of this council stated in a separate report: "Recent US economic data no longer supports the possibility of an imminent increase in interest rates, and markets have lowered their expectations of monetary policy tightening not only by the Federal Reserve, but also by the Bank of England and the European Central Bank."

They continued: "If bond yields remain at high levels despite this relatively expansionary adjustment in market expectations, this will indicate that investors are focusing less on short-term interest rates and more on deeper sovereign financial risks and bond maturities; Factors that can continue to support the demand for gold.