The gold council just published an update of gold ETF inflow/outflow data to end of March. For context from 2003, the first gold ETF, until 2022 when central banks doubled gold buying, there was been a very strong positive correlation of inflow/outflows into ETFs and the POG. That is the gold bull from 2003 to 2011 was due to ETFs buying lots of gold while the bear market from 2012 was due to ETFs selling lots of gold especially in 2013.
In the March quarter 2025 ETF funds brought 226t of gold a massive amount and heading towards the amount of central bank buying. This is the highest since central banks doubled their gold purchases in 2022 to an average of about 1,075t pa in 2022, 2023 and 2024 - ie an average of about 270t per quarter. Note the outflows from ETFs during 2022 and 2023 and until the 2nd quarter of 2024. There were some significant outflows of over 240t in 3rd quarter 2022 and almost 140t and 115t in 3rd quarter of 2023 and 1st quarter of 2024.
ETF outflows acted like a break on the gold price against central bank buying up to the 1st quarter 2024 - ie ETF gold selling subdued the POG. That all changed from late 1st quarter of 2024 - in the 2nd quarter of 2024 outflows were slightly negative and turned slightly positive in May and June months of 2024 - this resulted in the POG going up somewhat.
In the 3rd quarter of 2024 we saw quite a significant increase in the POG which seems to be have been due to inflows of gold into ETFs of about 95t. In the 4th quarter of 2024 there was a correction in POG with inflows into ETFs being subdued.
The POG in the March quarter 2025 rose by nearly 20% a very big increase and it was IMO due to the big inflows into gold ETFs of 226T and continued central bank buying. Given the uncertainty caused by Trump in the USA and around the world I expect continued strong gold inflows into ETFs which will push the POG higher especially given the increase in US bond yields which is not acting as a safe haven it traditionally does - if US bond yields stop acting as a safe haven then gold will go much much higher.
There is still room for even greater gold inflows into ETFs as illustrated below - 344t in Q1 2016, 301t, 443T and 284t in the first 3 quarters of 2020, 456t in Q1 2009 and 300t in Q2 2010. Even if ETFs only but 100t to 200t per quarter it will send the POG up significantly assuming central banks keep buying.
Goldman Sachs have a tail possible $US4,500 (ie $A7,350) POG in 2025 - I can't rule that out as a possibility in the current environment. Volatility can be gold's friend.
I have included a chart of central bank buying - data for the 1st quarter 2025 is not yet available and there is no data before 2010..
What will happen to gold miners?
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