In October, Gold ETFs continued to see inflows, marking a five-year high with holdings increasing by 55 tons to 3,892 tons. This growth represents the fifth consecutive month of net inflows and the ninth month this year, totaling nearly 674 tons since the start of the year.
The inflows were primarily driven by ETFs in North America and Asia, while Europe experienced its first outflows in five months, mainly from the UK and Germany. The largest Gold ETF in the US recorded the strongest inflows, and notably, four of the top six ETFs with inflows came from China.
Chinese Etfs See Significant Inflows
Chinese ETFs saw inflows of 34 tons in October, nearly matching the outflows in Europe, indicating a shift in demand from Europe to China. Bloomberg’s data suggested European ETF outflows, though Chinese ETFs were not included in this dataset, resulting in lower net inflows reported by Bloomberg at less than 10 tons.
In the World Gold Council’s data for the first 10 months, US holds the dominant position in net inflows, followed by China, and then Europe. Germany lags behind countries like India and Japan in ETF inflows, highlighting regional differences in gold investments.
We are seeing a sustained appetite for gold, with ETF holdings reaching a five-year high after inflows continued for the fifth straight month in October. This persistent accumulation, pushing holdings to 3,892 tons, suggests a strong underlying support for gold prices, which are currently hovering around $2,450 per ounce. The consistency of these inflows throughout most of 2025 should give us confidence in the metal’s bullish trend.
Sustained Demand Suggests Bullish Trend
Given this steady demand, derivative traders should consider maintaining or increasing long exposure. The recent US CPI data showing inflation remaining stubbornly high at 3.8% reinforces the case for gold as an inflation hedge. Using call options or long futures contracts could be an effective way to capitalize on further price appreciation driven by this physical demand.
It is crucial to notice the geographic shift in buying, as demand is rotating from Europe to North America and, most notably, Asia. While European ETFs saw outflows, Chinese ETFs absorbed a nearly equal amount, indicating a new, powerful source of demand. This shift suggests the gold rally is becoming more resilient and less dependent on traditional Western investors.
This retail and institutional trend is mirrored by official sector activity, as central banks reportedly purchased over 250 tonnes in the third quarter of 2025. This dual-front buying from both ETFs and central banks creates a solid floor for the market. We should interpret any price dips as potential buying opportunities rather than the start of a reversal.
The last time we saw ETF holdings at these levels was back in 2020, during the peak of global economic uncertainty and massive monetary stimulus. That historical context suggests the market is currently pricing in a similar level of risk and hedging against potential currency debasement. This backdrop supports a strategy of staying long on gold derivatives in the coming weeks.
