Precious Metals Weekly Market Update - May 13th 2025

Gold remains firmly in focus as both a tactical and structural asset, trading above $3,300/oz after touching a record intraday high of $3,500/oz in April. Price action continues to be supported by a combination of macroeconomic drivers: escalating US-China trade tensions, stagflation risks, a weakening US dollar, and growing expectations of rate cuts. This week, investor sentiment intensified after President Trump publicly criticized Fed Chair Powell and pressured for rate cuts, further undermining confidence in US economic policy and reinforcing gold’s appeal as a haven. 

Gold-backed ETFs saw significant inflows in April, adding $11 billion globally marking the fifth consecutive month of net buying and the strongest inflow since March 2022. These inflows pushed total ETF holdings to 3,561 tonnes and AUM to a record $379 billion. Asia led demand, accounting for 65% of global inflows, driven largely by China amid trade fears, equity volatility, and currency depreciation concerns. Japan and India also registered steady inflows, while North America posted a solid $4.5 billion rise in AUM. 

In contrast, European funds saw a modest outflow of $807 million, mainly from the UK, though this was partially offset by gains in Switzerland and France. Despite these outflows, European interest remained robust amid falling yields and dovish central bank actions. 

Trading volumes across global gold markets surged in tandem with price moves, indicating strong participation and liquidity. While momentum may moderate near term due to profit-taking, persistent geopolitical and financial market instability continues to offer medium- to long-term support for gold.