Exchange-traded fund money is being diverted from Bitcoin to gold, according to one of the world’s biggest asset managers.
Demand for bullion remains strong despite its high price, State Street Corporation has declared, with the Boston-based firm predicting the yellow metal is on the path to surpass $US4000 ($6130) an ounce sometime in the next six to 12 months.
This week an ounce of gold was worth more than $US3500 for the first time ever.
State Street believes a “divergence” between Bitcoin and gold ETF flows last month indicated that long-term appetite to invest in the precious metal had not waned.
“August marked the largest monthly divergence in spot gold (in)flows versus spot bitcoin (out)flows since March 2025,” the asset manager stated.
“Major US gold ETFs posted net inflows of $US4 billion last month versus net redemptions for the leading bitcoin ETFs of $0.9b.
“While net inflows for both alt-fiat sectors are positive on the year, the recent decline in the Bitcoin-gold ratio may imply investor demand for low volatility assets, risk-off hedges, and liquidity is on the rise.”
State Street, which has more than $7 trillion of assets under imanagement, believes the US Federal Reserve’s expected interest rate cuts later this month will be another tailwind for gold.
“Gold has historically benefited from recent Fed Reserve easing cycles and with markets expecting two to three additional Fed cuts by year-end, gold’s momentum has the opportunity to further extend above its new $US3000/oz baseline and into our $US3500 to $US3900/oz bull case.”
The tailwinds for a sustained gold price rise extend beyond the US’ borders.
“Gold’s share of global reserves has climbed to levels not seen since about 30 years ago, reaching 21 per cent as of the first quarter of 2025 by our estimates, with the World Gold Council reporting 26.8 per cent as of the second quarter of 2025,” State Street said.
“This upward trend underscores gold’s role as a leading alt-fiat instrument and further solidifies its case as a structural hedge in a world where confidence in fiat currencies is increasingly being questioned.
“Heightened (global) concerns over the US Fed’s independence, sanction risk and fiat credibility should continue to help gold’s reserve status remain at the forefront, and increase momentum in the years that follow.”
State Street’s forecast is more good news for the large cohort of ASX-listed gold miners. Locally based producers of the precious metal were sitting on more than $7.5b of cash by June 30, having raked it since bullion’s bull run began in 2023.
The likes of Evolution Mining, Genesis Minerals, Regis Resources and Vault Minerals have added at least 80 per cent to their stock value since the start of 2025.
