Gold's Structural Surge: Decoding ETF Flows, Fed Policy, and the Income-Generating Edge

The foundation of this shift is sustained institutional demand. Global gold ETFs have now recorded six consecutive monthly inflows, adding a staggering $5.2bn in November. This is not a one-off spike but a trend that has pushed total assets under management to a record $530bn. The scale is immense, with holdings climbing to the highest month-end level in history. This persistent capital influx signals a fundamental repositioning, moving beyond speculative trading to become a core, strategic asset class for a broadening base of investors.

Asia is the primary engine driving this structural change. The region attracted $3.2bn in November, with Chinese investors alone adding $2.2bn. This capital is flowing in response to a confluence of local pressures: equity market weakness, a rebounding gold price, and geopolitical tensions. Crucially, policy shifts are acting as a direct catalyst. The newly announced VAT reform in China may have further boosted flows as investors sought to avoid additional taxes on physical jewelry, turning to gold ETFs as a more tax-efficient alternative. This creates a powerful feedback loop where domestic economic and policy dynamics are actively fueling gold demand.