- Investors poured $16.4 billion into gold ETFs from February to April, a pace typically seen during inflation scares or crises. iShares Gold Trust and SPDR Gold Trust comprised nearly three-quarters of the net flow intake.
- However, April’s Core PCE reading hit its lowest level since March 2021, suggesting inflation pressures may be easing.
- Strong narratives—geopolitical tensions, and rate uncertainty—are driving demand. Yet, with positive real yields and subdued inflation expectations, gold’s fundamental case weakens. Although April’s flows have tapered compared to the prior two months, gold is still being used as a catch-all hedge against inflation, deflation, dollar weakness, and even falling inflation.
- If inflation cools further and rate cuts loom, gold’s rally could stall, especially if real yields rise or the dollar strengthens. But if inflation picks back up, recent inflows may look smart in hindsight.
