Gold Buying Returns: Western Investors' Return Key to Price Rally

Market data shows that after two consecutive months of capital outflows, investors are once again flooding into global gold markets.

According to the World Gold Council, global physical gold ETFs attracted $3 billion in inflows in July, increasing holdings by 23 tonnes to reach 4,068 tonnes—providing fresh momentum for gold price recovery.

This resurgence in buying interest shows clear regional disparities. Europe led the charge with $2 billion in inflows, marking the region’s second-highest monthly inflow this year. Asian funds contributed $616 million in inflows. In contrast, North America’s recovery was more modest, recording only about $71 million in inflows—described by the World Gold Council as a 'nascent recovery.'

Current spot gold prices hover around $4,400 per ounce, up approximately 9% this month, though still about 21% below the near-record high of nearly $5,600 reached in January.

Earlier this year, gold prices surged in January but retreated due to rising bond yields and a stronger U.S. dollar, which dampened investment demand. While Western asset managers temporarily pulled back, central banks and Asian investors continued accumulating gold, serving as a critical support pillar for the market.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted that signs of recovering Western investment demand are now emerging.

Market experts believe that whether North American investors can return en masse will be the 'key test' for the sustainability of this gold rally. A stronger buying wave from Western investors would add another vital demand pillar to the gold market.