Gold ETF Flows to Drive Prices Higher Through 2025 - Expert Analysis
In a recent report by Citi, experts predict that the shift in gold ETF flows will be a key factor in driving gold prices up to $3,000 per ounce by mid-2025. After a period of de-stocking, Citi analysts expect a significant turnaround in the physically backed gold ETF market, which historically has driven gold bull markets.
The analysts forecast a reversal in the trend of gold ETF outflows, with an expected net demand of 275 tonnes by 2025, compared to net selling of 250 tonnes in 2023. This shift in dynamics is crucial for pushing prices higher, especially as other factors like Chinese gold consumption slow down.
Citi emphasizes the importance of gold ETF inflows, citing past bull markets where strong ETF demand has played a key role. The projected increase in ETF demand share of gold mine supply from 1% in 2024 to 7-7.5% by 2025 marks a significant change in the market, with ETFs expected to absorb physical stocks.
Overall, Citi's analysis suggests that the upcoming period could see a substantial bull market driven by renewed interest in gold ETFs. With potential Fed rate cuts, increased U.S. recession risks, and heightened market volatility, investors may see significant gains in gold prices in the coming years.