Key Moments
- Gold set new highs 53 times in 2025, driving one of its strongest annual performances on record.
- Physically backed gold ETFs attracted $89 billion of global inflows in 2025, lifting total assets under management to $559 billion and physical holdings to 4,025 tons.
- The value of gold held by foreign central banks approached $4 trillion, overtaking their roughly $3.9 trillion in US Treasuries as the largest reserve asset.
Gold’s Record-Breaking Price Action in 2025
Gold’s advance in 2025 has significantly reshaped the financial landscape. The metal notched a new record high 53 times during the year, delivering one of its strongest performances on record. This powerful rally drove a surge in ETF demand, altered the composition of global foreign reserves, and generated substantial valuation gains on central-bank balance sheets.
Gold has been the star performer in 2025 as central banks and private investors gobbled up the yellow metal.
This has caused the purchasing power of gold to soar to new all-time highs. pic.twitter.com/EWYJ1dsu8Y
— Jurrien Timmer (@TimmerFidelity) January 8, 2026
ETF Demand Hits Unprecedented Levels
Investor appetite for gold was channeled heavily through physically backed exchange-traded funds. According to GoldHub, global inflows into these products reached a record $89 billion in 2025. As a result, ETF assets under management climbed to $559 billion, while the underlying physical gold holdings rose to a historic 4,025 tons.
The flagship fund in the space, SPDR Gold Shares (NYSE:GLD), delivered a return of 64% over the year, reflecting the strength of the underlying metal.
Regional ETF Flows: North America, Europe, and Asia
North America was the main driver of ETF growth, accounting for $51 billion of inflows. Europe and Asia, however, also logged some of their strongest years on record.
In Europe, gold ETFs saw $12 billion of inflows in 2025, reversing two consecutive years of outflows. Demand was particularly robust in the UK and Switzerland, where heightened geopolitical risks and the availability of currency-hedged products drew investors into gold-backed funds.
Asia recorded $25 billion in inflows, surpassing the region’s cumulative ETF inflows since its first gold products were launched in 2007. India led the region’s demand, while investors in China and Japan also increased their holdings. Higher gold prices and policy shifts encouraged many market participants to move away from jewelry-focused exposure and toward ETF instruments.
| Region | ETF Inflows in 2025 | Notable Drivers |
|---|---|---|
| North America | $51 billion | Strong investor demand for physically backed gold ETFs |
| Europe | $12 billion | Reversal after two years of losses; geopolitical risks; currency-hedged products |
| Asia | $25 billion | Record regional inflows; India-led demand; shift from jewelry to ETFs |
| Total (Global) | $89 billion | Record year for physically backed gold ETFs |
Gold Overtakes US Treasuries in Global Reserves
The powerful rally in gold prices, combined with continued central-bank purchases, has reshaped the structure of official foreign reserves. For the first time in nearly thirty years, gold has overtaken US Treasuries as the largest single foreign reserve asset.
World Gold Council data show that the value of gold held by foreign central banks is approaching $4 trillion. This figure has moved ahead of their roughly $3.9 trillion in US bonds. The shift marks a significant moment within the broader de-dollarization trend, as official institutions gradually move away from dollar-denominated securities in favor of bullion, which does not carry counterparty risk.
Central banks remain a central force behind this evolution. Despite elevated gold prices, the organization expects that they will have added another 1,000 tons to their reserves in 2025. Concerns about an increasingly fragmented global order, questions over fiscal sustainability, and worries about long-term currency stability are contributing to their sustained interest in gold holdings.
Impact on Central-Bank Balance Sheets
The surge in gold prices has also translated into stronger central-bank financial results, with Switzerland offering a prominent example. The Swiss National Bank reported a profit of about 26 billion Swiss francs in 2025, supported by a record valuation gain on its gold portfolio as prices climbed.
However, the broader “flight to safety” dynamic produced mixed consequences. According to UBS economist Alesandro Bee, gains from gold were partially offset by currency effects.
“On one hand, it was helped by a big increase in the price of gold, but on the other hand, the Swiss franc – another safe haven – gained in value which turned the gains on foreign equity markets into losses when converted back into francs,” he explained according to Reuters.
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