Investors have returned to gold in a big way in 2025, with inflows into gold exchange-traded funds (ETF) amassing US$21 billion globally in Q1, according to the World Gold Council.
Leading the charge locally, Betashares’ own Gold Bullion Currency Hedged ETF (ASX: QAU) has attracted the lion’s share of flows this year, reeling in $142 million in 2025 alone.
In fact, the ETF provider recently celebrated the milestone of its QAU exceeding $1 billion in funds under management.
Expounding on gold’s recent growth, Betashares senior investment strategist Cameron Gleeson confirmed to InvestorDaily that the ETF provider remains bullish on the commodity.
“Gold has been the ultimate Trump hedge for investors holding equities since the US election, rallying when policy shocks have rocked markets and providing strong returns in an absolute sense,” Gleeson said.
“While gold traditionally does well in periods of uncertainty, it has been supported by ongoing structural demand from central banks turning to gold as a store of value for a number of years.”
Gleeson added that in the current environment, currency hedging gold exposure makes strong strategic sense, with ETFs like QAU offering investors the best of both worlds – exposure to rising gold prices and potential gains from an appreciating Australian dollar.
“The US dollar is showing signs of structural weakness as economists revise down their expectations of US growth this year under the weight of tariffs.
“In this climate, I can’t see why gold can’t continue to grind higher from here, particularly as tariff deadlines approach and the US budget and debt ceiling come into focus,” the investment strategist said.
However, the 90-day tariff cut between the US and China earlier this week has taken markets and economists by surprise. As announced on Monday, tariffs on US exports to China will fall from 125 per cent to just 10 per cent, while tariffs on Chinese exports to the US will be reduced from 145 per cent to 30 per cent.
In response, share markets rallied sharply with the Dow Jones Index rising by 2.8 per cent to close at its highest level since 26 March and the S&P 500 index jumping 3.3 per cent to its highest closing level since 3 March.
Speaking to InvestorDaily, AMP’s Shane Oliver said while share markets are expected to thrive in the post tariff reduction period, gold could have a tougher time.
But Gleeson believes while the de-escalation and subsequent market gains are a positive sign, significant uncertainties remain.
“There is some sort of floor as to where these tariffs will end up. And I think everyone’s hoping that would be 10 per cent universal tariffs, but there is obviously a lot which is unknown,” he said.
Trade tensions aside, Gleeson warned that negative economic data could still emerge from the US, with the inflation outlook uncertain amid a sharp drop in consumer goods imports.
Moreover, he said, amid ongoing US budget negotiations – which must be resolved by July to avoid breaching the debt ceiling – gold is expected to maintain its status as a key safe haven asset. Namely, in the US, lawmakers remain at odds over a Republican proposal that pairs a $4 trillion debt limit increase with sweeping tax cuts and significant spending reductions, including cuts to Medicaid and clean energy programs.
“There are all these potential events, potential stumbling blocks, that lie on the road ahead, which means that gold is really an excellent hedge against some of the instability that we’ve seen so far in the first 100-plus days of Trump’s presidency,” Gleeson said.
“And if you pair that – the ability for gold to play a role there in uncertainty – with that strong structural buying from central banks, we think it’s a really valid asset class to include in portfolios.”
Gold ETFs to continue thriving
According to a report by State Street, gold ETFs have posted inflows of US$21 billion so far in 2025, bringing total AUM to US$345 billion, a sizeable resurgence from a year ago.
In addition to investor demand, the asset manager said banks are a major catalyst for growth in gold investing, especially in emerging markets, and have been net buyers of gold every year for the past 15 years.
This aggressive pace should continue, it noted, as governments diversify dollar-heavy reserves in response to de-dollarisation trends and investors hedge portfolios against economic headwinds.
“Coupled with rising gold prices, we expect global gold ETF AUM to nearly double in the near term and surpass US$500 billion by 2026,” State Street said.
