The demand for gold ETFs was driven by investors from North America and Asia, with Europe also contributing significantly to the growth. North America, in particular, maintained its strong momentum by adding US$7 billion in January, marking the eighth consecutive month of inflows. Despite a sharp price pullback towards the end of the month, following the nomination of Kevin Warsh as the new Federal Reserve Chair, the region still reported net positive flows on the final trading day. This resilience was supported by geopolitical tensions involving the US and other regions, which sustained investor interest in gold as a safe-haven asset.

"Even with the recent price decline, all regions except Europe saw net inflows on both 30 January and 2 February, as investors appeared to take advantage of the dip to add exposure to gold," noted a market analyst.

The geopolitical landscape played a crucial role in driving demand for gold ETFs in Europe as well. The region recorded inflows for the third consecutive month, adding US$2 billion in January. The strong performance of gold prices, combined with escalating geopolitical and trade frictions between the US and Europe, particularly President Trump's tariff threats linked to the Greenland dispute, increased investor interest in gold ETFs as a hedge against uncertainty. The broader market volatility stemming from EU preparations for retaliatory tariffs and pressure on export-heavy economies further reinforced the demand for defensive assets such as gold.

"In the UK, which led regional inflows, persistently elevated inflation and renewed political tensions further fuelled investor appetite for gold ETFs as a hedge against both domestic and external risks," said a European market strategist.

Asian funds also reported significant inflows, amounting to US$10 billion in January, marking their strongest month on record. This accounted for 51% of net global inflows, a notable achievement considering Asian holdings are only about one-fifth the size of North America's. China led the region's inflows with US$6 billion, ranking as the second-largest source of inflows globally, closely behind the US. The country's continued appetite for gold ETFs was underpinned by robust gold prices, lingering geopolitical uncertainty, and strong institutional demand.

"India also delivered sizeable inflows of US$2.5 billion, supported by continued momentum in gold prices and a rotation toward diversification as domestic equities underperformed," commented an Asian market analyst.

Other regions, including Australia and South Africa, also registered positive flows at the start of 2026, contributing US$295 million. This marked the second consecutive month of inflows for these regions, driven primarily by contributions from Australia.

The surge in gold ETF inflows was accompanied by a significant increase in global gold market trading volumes, which averaged US$621 billion per day in January. This represented a 51% month-on-month increase and was 72% above the 2025 average. The rise in trading volumes was particularly notable in the final week of the month, when heightened volatility pushed activity to an average of US$963 billion per day.

"Over-the-counter activity strengthened, with volumes rising to US$278 billion per day on the back of increased LBMA trading," noted a trading expert. "Meanwhile, elevated price volatility supported a sharp pick-up in derivatives trading across major exchanges, where volumes climbed to US$320 billion per day."

Trading in global gold ETFs also rose significantly to US$23 billion per day, driven largely by a near 200% increase in North American ETF activity, partly due to options expiry and month-end volatility. In tonnage terms, trading volumes averaged 3,998 tonnes per day in January, up 35% month-on-month and well above the 2025 average of 3,247 tonnes per day.

Positioning data showed a moderation, with total COMEX net longs falling 6% during the month to 642 tonnes. This decline, however, does not capture the final days of elevated volatility. Money manager net longs slipped 4% to 378 tonnes, while Other net longs declined 8% to 264 tonnes, likely reflecting profit-taking after steady net-long buildup earlier in the month.