• Physically backed gold ETFs saw $5.5 billion in inflows in August, pushing assets to a record $407 billion, driven by North American and European demand
• North America added $4.1 billion and Europe $1.9 billion, while Asia saw $495 million in outflows, led by China’s stock market gains
• Zimbabwe’s gold production supports a feasible gold-backed ETF, but regulatory, infrastructure, and currency challenges need addressing

Harare- Physically backed gold ETFs in August had inflows of US$5.5 billion, marking three months in a row of positive flows.

Gold-backed ETFs are investment funds that hold physical gold and are traded on stock exchanges like stocks. Each share represents a small amount of gold, and the fund’s value moves with the price of gold. Investors can buy these shares without needing to store or insure physical gold themselves.

The gold is kept in secure vaults by the fund managers, making it a safe and easy way to invest in gold. These ETFs are popular during times of economic uncertainty, inflation, or currency weakness because gold tends to hold its value.

North America and Europe led the gains, while Asia and other regions saw small outflows. So far this year, inflows reached US$47 billion, the second-highest ever, only behind 2020.

Rising gold prices and these inflows pushed the total value of gold ETFs to a new record of US$407 billion. Holdings also grew by 53 tonnes to 3,692 tonnes, the highest since July 2022, but still 6% below the all-time high from November 2020.

In North America, funds added US$4.1 billion, driven by trade risks, market uncertainty, and a weaker dollar, which makes holding gold more attractive.

Investors also expected lower interest rates after comments from Federal Reserve Chair Jerome Powell, which reversed earlier outflows. Low-cost gold ETFs, often used for long-term safe-haven investments, are having their best year ever, showing investors are preparing for ongoing risks.

European funds saw inflows of US$1.9 billion for the fourth straight month, led by the UK, Switzerland, and Germany. In Switzerland, a surprise 39% US tariff hurt economic hopes, increasing demand for gold as a safe haven.

In Germany, fears of a recession grew after weaker economic growth data, boosting gold demand. A stronger euro and Swiss franc also lifted interest in gold products that protect against currency changes.

In the UK, worries about rising prices and slow growth, worsened by US tariffs and a possible tax increase, drove more investment in gold.

Asia, however, saw outflows of US$495 million, mainly from China, where a 10% jump in the stock market pulled investors away from gold. India, on the other hand, had inflows for the fourth month in a row, supported by weak stock markets and global trade and geopolitical concerns, though this wasn’t enough to offset China’s losses. Other regions had small outflows, with Australia’s gains unable to balance South Africa’s losses.

Daily gold market trading stayed steady at US$290 billion, down just 2% from July. Trading on exchanges like COMEX and Shanghai dropped 17%, but overall volumes were above the 2024 average.

Gold ETF trading fell 9% to US$4.5 billion per day, but over-the-counter trading rose 12% to US$171 billion per day, higher than the 2024 average.

On COMEX, total gold futures bets dropped 3.4% to 652 tonnes, but money managers increased their bullish bets by 3.7% to 461 tonnes, especially after US tariffs on Swiss gold pushed prices up late in the month.

Gold-Backed ETFs in Countries Like Zimbabwe

In Africa, the gold ETF market is significantly smaller and primarily centered in South Africa, a major gold producer on the continent; the largest and most prominent is the Absa NewGold ETF (GLD), listed on the Johannesburg Stock Exchange (JSE), with an AUM of roughly $500 million as of August 2025, providing local investors with rand-denominated access to physical gold backed by bullion stored in secure vaults, though the region overall accounts for less than 1% of global gold ETF holdings amid challenges like limited liquidity and regulatory hurdles.

Creating gold-backed ETFs in Zimbabwe, where economic challenges like inflation and currency instability are common, is possible but tricky. Zimbabwe produces a lot of gold, which could be used to back an ETF. The country’s economic history, including hyperinflation, makes gold appealing as a way to protect wealth.

Here’s how it could work and the challenges involved. First, Zimbabwe would need clear rules for ETFs, overseen by the Securities and Exchange Commission of Zimbabwe (SECZ). These rules would cover how funds are created, traded, and how gold is stored.

The challenge is that Zimbabwe’s financial system may need upgrades to ensure trust and meet global standards. Working with international experts, like those from South Africa’s successful gold ETF market, could help set this up.

A bank or financial company could launch the ETF by buying gold from Zimbabwe’s mines and storing it in secure vaults. Shares would then be sold on the Zimbabwe Stock Exchange (ZSE) or a larger regional exchange.

However, the ZSE is small, and secure storage might be limited. Partnering with global firms or using existing mining storage could solve this. Local investors could buy ETF shares using ZiG, US dollars (widely used), or mobile money platforms like EcoCash.

The challenge is that many Zimbabweans may not have enough money or knowledge to invest.

Education campaigns and low-cost shares could help, along with allowing US dollar transactions to avoid currency issues. Zimbabwe’s gold production is a strength, but the gold must meet global purity and ethical standards to attract investors.

Regular audits would build trust. Currency instability is another hurdle, so offering ETFs in US dollars or with currency protections could help. Foreign investors might be cautious due to Zimbabwe’s economic risks, but listing the ETF on a trusted exchange could boost confidence.

South Africa’s NewGold ETF shows how this could work: it’s backed by physical gold, listed on a major exchange, and accessible to many investors.

Zimbabwe could follow this model by using its gold, ensuring secure storage, and promoting the ETF as a way to protect against inflation. Until a local ETF is created, Zimbabweans might consider regional ETFs, like those in South Africa.

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