Gold Prices Climb as ETF Inflows Surge, Fueling Gold-Backed Crypto Rally

Gold’s bullish momentum continues into 2025, with prices up nearly 11% year-to-date and 43% over the past year, as investors turn to the precious metal amid growing economic and geopolitical uncertainty.

Meanwhile, spot Bitcoin ETFs saw their largest-ever daily outflow of nearly $1 billion, while gold ETFs continue to attract strong inflows, signaling a shift in investor sentiment toward traditional safe-haven assets.

Gold ETFs Register Largest Inflows Since 2022

According to the World Gold Council, physically backed gold ETFs recorded their biggest weekly inflow since March 2022, adding 52.4 tons ($4.9 billion). The majority of these inflows came from North American investors, reflecting increasing institutional interest in gold.

Total gold ETF holdings now stand at 3,326 tons, with a market value of approximately $314 billion.

Currently trading at $2,910 per ounce, gold’s strength is being attributed to rising geopolitical tensions and market concerns over possible U.S. trade tariffs linked to a potential second Trump presidency.

Gold-Backed Cryptos Outperform Broader Market

Gold-pegged cryptocurrencies such as Paxos Gold (PAXG) and Tether Gold (XAUT), which track the metal’s price, have outperformed the overall crypto market. While the CoinDesk 20 Index shows 26% growth year-over-year, gold-backed tokens have benefited even more from surging demand.

Blockchain data from RWA.xyz reveals that over $25 million in gold-backed tokens were minted this month, marking the highest issuance since December 2022, while $12 million in tokens were burned.

Limited Supply Could Drive Further Gains

Despite the increasing demand, gold supply remains constrained. World Gold Council data indicates that gold mining production declined by two tons in Q4 2024, while hedging and recycling efforts increased. In total, gold supply rose just 1% year-over-year, potentially adding further upward pressure on prices.

With institutional demand surging and supply tightening, gold’s rally shows no signs of slowing, with gold-backed cryptocurrencies reaping the benefits of the metal’s strong performance.