Global gold ETFs added 121 tonnes of gold in August.
During the first seven months of this year, central banks bought roughly 130 tonnes of gold on a net basis.
So ETF investors added almost as much gold in a single month as central banks did over seven months.
That is no longer a small flow.
Over the past few years, the gold story has been driven largely by central-bank buying, China, and the movement of physical metal toward the East. Western investment demand was much less convincing.
Now that part of the story is starting to change as well.
Central banks do not need to stop buying for the market structure to shift. It is enough for significant ETF inflows to start joining that demand.
Suddenly, gold is not being supported only by long-term institutional buyers. Another major source of demand is returning.
(It is still important to remember that these are ETFs — financial instruments, not direct ownership of physical gold in the investor’s hands.)
121 tonnes in August is definitely not a number I would ignore.
If ETF inflows continue over the coming months, Western investment demand could once again become one of the major forces in the gold market.
And that would mean the current gold bull market is no longer being driven by central banks alone.
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