28 April, 2022

ETF inflows came flooding back in Q1 on safe-haven demand and inflation concerns; bar and coin investment, although healthy, failed to match lofty year-earlier levels

  • Global gold ETFs attracted 269t of inflows in Q1, more than reversing last year’s 174t annual net outflow 
  • Retail investment in gold was healthy compared with longer-term averages, but down 20% y-o-y, reflecting weakness in China, Turkey and Japan 
  • Overall investment demand more than trebled from 182t in Q1’21, to 551t in Q1’22.
Tonnes Q1'21 Q1'22   YoY % change
Investment 181.8 550.7 203
Bar & coin 351.8 281.9 -20
  India 39.3 41.3 5
  China, P.R.:Mainland 86.5 49.3 -43
Gold-backed ETFs -170.0 268.8    -

Source: Metals Focus, World Gold Council

Investment demand for gold in Q1 returned to levels that were last seen during the early months of the pandemic in 2020, fuelled by similar drivers: namely, safe haven flows and high/rising gold prices. Heightened geopolitical risk, caused by the invasion of Ukraine, encouraged investment flows, which fed through to a sharp rise in the gold price. Inflation concerns – already supportive for gold investment – were accelerated by the conflict, with data prints showing prices across the globe rising at a multi-decade, if not record, pace. Rising interest rates were, however, a continued headwind and this likely tempered investment inflows to an extent.


Global gold ETF demand came roaring back in Q1 2022, registering net inflows of 269t (US$17bn). This was the highest level of quarterly inflows since Q3 2020, eclipsing the 173t of net outflows seen in 2021. In our view, gold price strength, equity market weakness, rapidly rising inflation expectations and unexpected geopolitical events during the quarter were the key drivers of this demand, even in spite of higher nominal rates.


Q1 inflows into gold ETFs were the highest since Q3 2020, erasing outflows seen in 2021*

Q1 inflows into gold ETFs were the highest since Q3 2020, erasing outflows seen in 2021*

Q1 inflows into gold ETFs were the highest since Q3 2020, erasing outflows seen in 2021*
*Data to 31 March 2021. On Goldhub, see: Global gold-backed ETF holdings and flows. Sources: Bloomberg, Company Filings, ICE Benchmark Administration, World Gold Council

Sources: Bloomberg, Company Filings, ICE Benchmark Administration, World Gold Council; Disclaimer

*Data to 31 March 2022. On Goldhub, see: Gold ETFs holdings and flows

The strong ETF demand in Q1 lifted global holdings to 3,836t (US$240bn) at the end of the quarter, just 2% away from the record high of 3,922t in November 2020 and 5% away from the record AUM of US$253bn achieved in August 2020.

At a regional level, inflows were heavily concentrated in Western funds. North American-listed funds grew by 171t, with chunky inflows into US-listed funds dwarfing outflows from Canadian-listed funds. A significant jump in the gold price in January, in the lead up to the gold ETF option expiry, contributed to the strong inflows at the start of the year. Thereafter, flight-to-quality continued to be supportive of flows into the larger, more liquid US funds, which tend to be more reactive to changes in the gold price than those in other regions.

European-listed funds saw net inflows of 111t – propelling regional holdings to a new record high of 1,676t (US$105bn). European inflows were dominated by UK-listed funds (78t), but healthy inflows were also seen in German- (23t) and French-listed (9t) funds, with all three hitting record holdings during March. The Russia–Ukraine war exacerbated fears of yet higher inflation – which has already hit record levels – due to the region’s dependence on Russian energy supplies. This may have supported investment as gold is a well-recognised hedge against inflation.

Asia was the only region to see outflows during the quarter – with holdings declining by 15t (11%). At a country level, Chinese-listed funds saw the biggest declines during the quarter, with outflows of 13t. Demand was impacted by the market closure over the Chinese New Year Holiday in late January and early February, as well as by profit-taking as local investors continued to act tactically in response to the rising gold price. Indian gold ETFs saw more modest outflows of just over 1t in Q1, due to a combination of higher sovereign bond yields and profit-taking. However, a correction in the local gold price in March led to minor inflows in the month, demonstrating that investors are willing to step back in.

Funds listed in other regions saw minor inflows of 2t during Q1, largely due to flows into Australian-listed funds.

Bar and coin

Retail investment totalled 282t in Q1. This was 20% weaker than Q1’21, although the y-o-y comparison is affected by the fact that investment in the year-earlier period was very strong. From a longer-term perspective, investment demand remains healthy: 11% higher than the five-year quarterly average of 254t.

Bar and coin investment was mixed across markets. The sharp rise in the US$ gold price did not quite reach the 2020 record, but foreign exchange movements meant that local prices in a number of currencies were at or close to new historical highs. This generated profit-taking in some markets, notable examples being Turkey and Japan, and this outweighed continued safe-haven investment elsewhere.


Retail bar and coin investment fell 20% y-o-y in Q1, but held above 5-year quarterly average

Retail bar and coin investment fell 20% y-o-y in Q1, but held above 5-year quarterly average

Retail bar and coin investment fell 20% y-o-y in Q1, but held above 5-year quarterly average
Quarterly bar and coin demand
Note: Data as of 31 March 2022. *Average is the five-year quarterly average between Q1'17 and Q4'21. Source: Metals Focus, World Gold Council

Sources: Metals Focus, World Gold Council; Disclaimer

*Data to 31 March 2022. * Average is the five-year quarterly average between Q1'17 and Q4'21


Bar and coin demand in China fell sharply in Q1, down 43% y-o-y to 49t. The quarter started on a healthy footing, lifted by gifting demand related to the Chinese New Year and by safe-haven motives following Russia’s invasion of Ukraine. But the combination of a sharp gold price rally and lockdowns imposed on various cities across China soon brought demand to a virtual standstill.

Gold coin sales performed strongly, thanks to themed products such as the Year of the Tiger coin and the Winter Olympics coin, which benefited from gifting and collection purchases. However, these only account for a small share of the market. In contrast, demand for gold bars was significantly weaker.

Looking ahead, we expect a sharper-than-normal q-o-q decline in the second quarter. Seasonal factors usually result in weaker Q2 demand (over the last ten years, the average q-o-q decline in Q2 is 27%), but economic pressure amid COVID related lockdowns is likely to exert a further drag. Strict mobility restrictions in various cities are likely to weigh on bar and coin sales as these physical gold purchases are mainly made offline.


Indian bar and coin investment increased 5% y-o-y to 41t – the strongest first quarter since 2014. Retail investors focused on gold’s safe haven attributes amid volatility in local equity markets and the war in Ukraine. The BSE Sensex index fell sharply between mid-January and early March in contrast to the rapid climb in local gold prices over the same period. Investors were attracted by gold’s strong relative (and actual) returns, particularly given the paltry return on government bonds.

However, increased volatility in the gold price sent a note of caution and demand tailed off towards the end of the quarter, pushing the local price to a fairly wide premium during March. Underlying investment demand remains healthy, but any further price volatility would likely discourage investment to an extent.

India’s gold market continues to make strides towards developing its position on the global stage. Trading on the India International Bullion Exchange (IIBX) launched in April, with the first bullion deposit repository (BDR) created and traded. The IIBX is expected to become a conduit for gold imports in India and the launch of trading on this platform is a first step towards establishing India as one of the world’s leading bullion trading hubs. 

Middle East and Turkey

Currency-related price moves drove a sharp y-o-y decline in Turkish retail investment. Bar and coin demand fell 77% y-o-y in Q1 to 10t – the weakest start to any year since 2017. It is worth noting, however, that the comparison is with Q1’21, when a wave of bargain hunting lifted demand to a record for any first quarter in our data series.

The fall in Q1 demand was almost entirely price-related. Lira weakness fed through to high and rising local gold prices. And while there was no a repeat of December’s sharp spike to a record high, TL prices were nonetheless very elevated: on a quarterly average basis, the price was TL845/g, compared with TL648/g in Q4. Reports suggest that the higher prices did not generate significant profit-taking, but rather resulted in a sharp slowdown in fresh buying, as investors preferred to wait for opportunities to invest at lower prices.

Bar and coin demand in the Middle East of 17t recovered to match pre-pandemic levels, with Iran driving regional growth. Currency moves were the key to investment growth in Iran: the rial appreciated against the dollar, leading to a dip in the local gold price, which encouraged investors. Bar and coin demand jumped over 50% to 9t, recovering from very low Q1’21 levels. Egypt also saw growth in Q1, albeit also from a very low base. Demand was up 12% y-o-y to almost 11t, partly reflecting a greater availability of small bars and coins.

The West

Geopolitical tensions added to continued inflation concerns and fuelled retail investment in the US. Bar and coin demand was unchanged from Q1’21 at 32t and 6% higher q-o-q. The strength of investment interest is reflected in bullion coin sales from the US Mint: data shows that combined sales of American Eagle and Buffalo coins in Q1 reached 518,000oz (over US$1bn), the second highest Q1 sales volume, second only to Q1 1999. This performance clearly shows that last year’s strong retail interest in physical gold investment products has continued into 2022.

As the regional geopolitical crisis erupted, European bar and coin demand jumped to 78t, the highest quarterly total since Q2 2013. Q1 investment demand was 23% up from the previous quarter and 6% higher y-o-y. Already healthy gold sales, fuelled by inflation concerns and negative savings rates, accelerated in late February and March as investors reacted to Russia’s invasion of Ukraine. Germany remains the dominant market in the region, but gains were widespread and demand in the UK reached a 10-year high of 4t.

The euro price surged to a record high during the quarter, which encouraged a degree of profit-taking, but anecdotal reports suggest this was limited. The sharp rise in demand, at a time of COVID-related staff absences, reportedly created bottlenecks in the supply chain: arguably, regional investment may have been higher in Q1 were it not for these issues.

ASEAN markets

Investment demand in Indonesia fell by 10% y-o-y to 5t. Higher local gold prices and the Omicron surge have prompted many investors to hold back their bar and coin purchases.

Bar and coin investment in Thailand declined 74% y-o-y to less than 2t. Although consumers in Thailand have been net buyers for the last five quarters, the recent price surge has prompted many investors to sell, locking in profits. Anecdotal evidence suggests that retail gold products continue to face significant competition from paper gold products.

Retail investment in Vietnam increased 4% y-o-y to 14t. Rising inflation and a weakening dong has increased the attractiveness of gold. This is reflected in high local premiums – high gold prices, improved investment and jewellery demand, and a lack of local supply reportedly pushed local premiums to a record $500 per tael.

Bar and coin investment demand in Singapore recovered to pre-pandemic levels, up 17% y-o-y to almost 2t. This is the highest quarterly demand since Q4 2016. Inflation concerns and volatility in equity markets in emerging market countries will likely have heightened gold’s appeal.

Bar and coin investment demand in Malaysia also recovered, rising 19% y-o-y to a little below 2t. The y-o-y growth rate in part reflects the relatively low base of Q1’21 when lockdowns were still in place. However, lifting of COVID-related restrictions, the post-pandemic economic recovery and concerns about inflation likely spurred the recovery in retail investment back to pre-COVID levels.  

Rest of Asia

There was 9t of net selling in Japan in the first quarter, compared with 5t of positive net investment in Q1’21. The combination of currency moves and the high and rising gold price encouraged a surge in profit-taking, as a weakening yen pushed the local gold price to a series of fresh record highs. This triggered heavy net selling and discouraged fresh buying interest. That said, risk aversion – in the light of geopolitical tensions – is reportedly underpinning demand to an extent.

Retail bar and coin investment in South Korea declined 18% y-o-y to 5t. This was largely due to high gold prices, and the Omicron wave which peaked in the quarter.


Bar and coin demand in Australia increased 19% y-o-y to just over 6t. With core inflation in Australia expected to top the RBA’s 2-3% target band for the first time since 2010, gold’s role as an inflation hedge is in the spotlight. Australian investors have significant exposure to property and pro-cyclical assets, and gold is used a diversifier and as a hedge against a property bubble. This is the first time the Australian bar and coin market has been included in GDT; our estimates suggest that 20.3t of bars and coins were purchased in 2021.

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