Global Gold ETF Assets Hit $407 Billion, Silver Tops $40 Billion: What’s Next?

2025 has turned into a golden year with ETFs too driving the momentum. Since January, gold ETFs have delivered close to 40% returns, while silver ETFs have done even better at nearly 43%. The rally reflects both macroeconomic shifts, central bank policies, industrial demand, and changing investor behaviour. Gold prices have crossed Rs 1,14,000 per 10 grams, up nearly 47% since January this year, while silver is trading at about Rs 1,35,000 per kilogram, gaining around 53% in the same period.

What needs to be watched is the gold-silver ratio, which crossed above 100 early in the year, is now trending around 88-91, suggesting silver still has room to catch up. Global gold ETFs' total assets under management reached a record US$407 billion in August, which was lifted by rising prices and inflows from Western funds. Meanwhile, global silver ETF holdings hit 1.13 billion ounces, valued at over $40 billion. What's driving this rally?

Central bank sparks confidence

One of the major drivers of this surge has been central banks. Since the 2008 financial crisis, they have been net sellers. And for over 16 years now, they have been consistent net buyers, says Trivesh, COO Tradejini.

Geopolitical tensions, currency fluctuations, and the need to decrease dependence on the US dollar have driven nations to actively accumulate gold reserves.

"Thus, the consistent demand provides price stability and upside for gold ETFs, which has given investors confidence that these assets are not simply a short-term hedge but a long-term strategic play," said Trivesh, COO Tradejini.

Silver's dual role

Increasing industrial demand in several sectors has shown the uptick in Silver, reflecting not only a renewed interest from investors, but furthermore that it has a significant industrial role, tending to solar panels, electric vehicles, 5G networks and other green technologies.

As per Trivesh, now it has developed the dual purpose of not only a safe-haven asset, but also an economic growth metal, which creates a stronger appeal. This balance has helped it reach a stronger position in investor portfolios, moving beyond its traditional role as 'gold's cousin' to become a more prominent standalone asset.

Market dynamics

A weaker US dollar has provided a boost for both metals. Lower interest rates globally and central banks' supportive approach have lowered the opportunity cost of owning non-yielding assets such as gold and silver.

"Meanwhile, geopolitical volatility such as tariffs and H-1B visa reforms remain to boost the safe-haven appeal. Today investor's perception of ETFs is not only as insurance against currency and market volatility but also as a liquid, easy-to-use instrument to react fast to anything that happens in the world. The ease of leveraging ETFs enhances their attraction over the old bars or coins," Trivesh added.

Investor's move

The story behind gold and silver is changing. Historically seen as passive hedges against inflation or market volatility, these metals are now framed as active portfolio drivers.

"Precious metals should be held in 15-20% of the portfolio for a balance of risk and opportunity. The combination of central bank buying, industrial consumption of silver, and retail usage through ETFs implies the trend could endure, although policy shifts and short-term market revisions might produce temporary troughs," Trivesh recommended.

Next chapter in precious metals investing

These metals are no longer mere safety nets but risk management tools and opportunity grabbers in a churning market. The rally is strong, with both metals attracting considerable investor interest.

Interestingly, Indian women hold nearly 11% of the world's gold, around 25,000 tonnes, much of it idle in the locker. Now the trend is seen where Gen Z and retail investors are shifting toward ETFs for liquidity and flexibility which is clearly seen through the ETF's numbers, Trivesh stated.

Gold and silver ETFs offer a modern, digital way to invest, blending tradition with strategy.

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