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WisdomTree
Gold Monthly
March 2025
Nitesh Shah
Head of Commodities and Macroeconomic Research, WisdomTree Europe
Nitesh Shah is a seasoned financial professional with over 24 years of experience in research and investment strategy. As Head of Commodities & Macroeconomic Research at WisdomTree Europe, he leads market analysis and insights across asset classes, with a focus on commodities and exchange-traded products. Previously, he held roles at Moody’s, HSBC Investment Bank, The Pension Protection Fund, and Decision Economics, building expertise in market analysis and strategy.
Nitesh earned a master’s degree in International Economics and Finance from Brandeis University and a bachelor's in Economics from the London School of Economics. His insights are frequently featured in financial media, and he is a sought-after speaker at industry events. He also hosts the ‘Commodity Exchange’ podcast, where he discusses trends shaping global markets. Passionate about guiding investors, Nitesh provides actionable insights to help them navigate complex financial landscapes.
Heightened uncertainty pushes gold past $3000/oz
Gold surged past $3,000 per ounce on the morning of 14 March 2025 to its highest price on record, before pulling back below this psychologically significant level within hours. The precious metal, widely regarded as a hedge against inflation, geopolitical instability, and financial and economic risks, has multiple catalysts driving its ascent. Additionally, negative economic news often benefits gold, as markets anticipate policy responses.
The weaker-than-expected US Consumer Price Index (CPI) data for February has increased expectations of Federal Reserve (Fed) monetary policy easing, fuelling gold’s rally. Meanwhile, escalating trade tensions—evidenced by new US tariffs on aluminium and steel—are prompting investors to seek gold as a safe-haven asset amid market turbulence. The US’s push for a peace deal between Russia and Ukraine has come at the cost of deteriorating relations with Europe, exacerbating geopolitical concerns and further boosting demand for gold.
Bond and dollar are now tailwinds for gold
Gold has been supported by a weakening US dollar (Figure 1) and declining Treasury yields (Figure 2) since January 2025, reversing much of the trend seen since September 2024. A reassessment of the strength of the US economy and the anticipated need for monetary easing are key drivers of this shift. Expectations of continued dollar appreciation amid rising trade tariffs are being challenged. Some market participants speculate that the Trump administration may pursue a weaker dollar policy, though no official confirmation has been provided.
Figure 1: Gold and US dollar basket
Source: WisdomTree, Bloomberg. January 2019 to March 2025. Daily data. Historical performance is not an indication of future performance and any investments may go down in value.
Figure 2: Gold and US treasury inflation protected securities
Source: WisdomTree, Bloomberg. January 2019 to March 2025. Daily data. Historical performance is not an indication of future performance and any investments may go down in value.
Even ETP investors are now interested in gold!
After modest inflows into gold exchange-traded products (ETPs) resumed in May 2024, investment flows have accelerated in March 2025. On 13 March 2025, 20-day cumulative inflows into gold ETPs reached their highest levels since 14 April 2022. Given today’s elevated gold prices, this shift in investor sentiment marks a notable change in behaviour.
Figure 3: Gold held in exchange-traded products
Source: WisdomTree, Bloomberg. January 2022 to March 2025. Daily data. Historical performance is not an indication of future performance and any investments may go down in value.
Record-high China ETP inflows in February
Gold ETP inflows over the past month have been broad-based, spanning North America, Europe, and Asia. In February, Chinese gold ETPs saw record inflows of RMB14 billion (approximately $1.9 billion), the largest monthly inflow ever. These substantial investments, combined with rising gold prices, pushed the total assets under management (AUM) of Chinese gold ETPs to RMB89 billion ($12 billion), marking another month-end peak.
Chinese insurance companies to drive additional demand
Chinese gold demand could rise further following a new policy from the National Financial Regulatory Administration of China. The recently issued ‘Notice on Launching a Pilot Program for Insurance Funds to Invest in Gold’ allows ten insurance companies to allocate up to 1% of their assets to gold investments. This could result in up to $27 billion in additional gold demand, according to KITCO1.
Central banks maintain strong gold demand
Central bank demand for gold remains robust. In February, the People’s Bank of China (PBOC) confirmed another month of gold purchases, adding 5 tonnes to its reserves and reaching a new high. This marks four consecutive months of buying, reinforcing the central bank’s view of gold as a strategic diversifier amid heightened geopolitical and financial risks, exacerbated by ongoing trade disputes.
Last year, the PBOC took a six-month hiatus from gold purchases, but the absence of a sufficiently attractive re-entry point led to a resumption of buying. With gold accounting for less than 6% of China’s foreign exchange reserves—compared to over 70% for the US, Italy, Germany, and France—significant future purchases remain likely, particularly given China’s concerns over US policymaking and its impact on US dollar reserves.
In addition to China, other central banks have been actively acquiring gold. Uzbekistan and Kazakhstan purchased a combined 12 tonnes in January, more than offsetting Russia’s 4-tonne sale. The National Bank of Kazakhstan has also begun selling US dollars as part of "mirroring operations related to gold purchases”, effectively supporting a de-dollarisation strategy. Meanwhile, Poland and the Czech Republic bought a combined 5 tonnes in February, with Poland emerging as the largest gold buyer of 2024.
Gold exchange for physical (EFP) market stabilises
The spread between spot gold prices and New York COMEX front-month futures has narrowed after sharp spikes in January, indicating that the market is less concerned about gold being caught up in tariffs. While the US administration has not explicitly exempted gold or other bullion from trade measures, rising COMEX inventory levels provide reassurance that sufficient gold is available for delivery.
Nonetheless, this remains a critical area to monitor. If universal tariffs are implemented without exemptions, a renewed divergence between London and New York gold prices could emerge. Additionally, much of the recent gold influx into New York is in 400-ounce bars, which require refining into 100-ounce bars to meet COMEX delivery standards, adding another layer of complexity.
Figure 4: Front month gold futures less spot price
Source: WisdomTree, Bloomberg. January 2020 to March 2025. Daily data. Historical performance is not an indication of future performance and any investments may go down in value.
Figure 5: COMEX gold inventory
Source: WisdomTree, Bloomberg. January 2020 to March 2025. Daily data. Historical performance is not an indication of future performance and any investments may go down in value.