As per the WGC, the outflows were primarily driven by Asia and North America, which saw amounts worth USD 12 billion and USD 11 billion, respectively. Europe was the only region to register net inflows, attracting USD 3.34 billion in May.

“Despite the monthly net outflow, year-to-date fund flows into global gold ETFs remain positive, with cumulative net inflows approaching USD 17 billion,” WGC remarked.

As per the WGC, gold prices traded sideways in May without clear directional catalysts, prompting many investors to stay on the sidelines and adopt a wait-and-see stance. Meanwhile, risky assets such as technology stocks regained investor interest, with global technology-related ETFs recording their largest single-month net inflows since the beginning of 2024, leaving gold ETFs at a distinct disadvantage in terms of asset allocation competition.

As consensus macro trades—including gold—were largely realised in the first quarter, some investors who missed the rally or needed to catch up with benchmark performance have redirected capital back into cyclical sectors such as technology. Market reaction to the escalating tensions in the Middle East has so far remained muted, and safe-haven demand has yet to provide meaningful support,” WGC noted in its report.

Apart from registering net outflows of USD 11 billion, North America is also witnessing sluggish fund inflows since prices of the yellow metal entered a consolidation phase following their March pullback, suggesting investors are awaiting clearer entry signals.

“Beyond price dynamics, the opportunity cost of holding gold has also increased—with a stronger US dollar, persistently high interest rates, and shifting market expectations regarding the Federal Reserve’s future rate-cut trajectory all constraining gold demand. Additionally, inflation concerns stemming from US-Iran tensions have further clouded the interest rate outlook, leading some market participants to believe the Fed may need to maintain a restrictive monetary policy stance for longer,” WGC remarked.

Talking about Asia, funds on the continent recorded their first monthly net outflow since August 2025 in May, totalling USD 1.2 billion, with nearly all of the decline attributable to the Chinese market, due to factors like weakening domestic gold prices, renminbi appreciation and sustained bullish sentiment in the equity market that are collectively dampening the local demand for gold ETFs.

“The Indian market also experienced outflows amounting to USD 610 million, ending a streak of 12 consecutive months of net inflows. Notably, most of India’s outflows in May occurred after the announcement of higher import tariffs, as investors took profits amid rising domestic gold prices,” WGC noted.

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“The month saw a staggering USD 12 billion exit, marking the largest monthly outflow on record. Despite the turbulence, the market managed to secure its seventh consecutive quarter of net inflows, with total assets under management reaching USD 606 billion,” the report stated.

In contrast to North America’s sell-off, Asian markets experienced unprecedented inflows. In Q1 2026, the region witnessed its strongest influx ever, adding USD 14 billion, driven mainly by China’s safe-haven demand amid declining local equities and a weakening currency. Indian investors came second, bringing their quarterly total to USD 3 billion. In March, there was a significant USD 2 billion addition for Asian gold ETFs, making the quarter the most robust one on record.

The World Gold Council report also cites a combination of risk-off conditions in North America, including investors’ tendency to liquidate profitable gold positions, as the reason for the ETF outflows.

“The stronger US dollar and stagnant interest rate projections through September 2027 further impacted demand. Notably, prolonged inflow periods like this were historically only seen during major financial crises, followed by sharp market reversals,” the report remarked.

North America’s monumental USD 13 billion outflow in March was a significant event, ending a nine-month streak of ETF inflows and making it the sole region to witness net outflows in Q1. European funds, on the other hand, experienced modest outflows of USD 154 million, trimming the region’s quarterly inflow to a mere USD 27 million. The continent’s sales, driven by Germany, Italy, and France, closely correlated with price shifts.

While the European Central Bank’s (ECB) hawkish tone and increasing regional yields augmented local investors’ opportunity costs, euro depreciation intensified Swiss losses.

However, the overall global market liquidity remained solid; March’s daily trading volumes averaged USD 525 billion, a 11% rise from February. Over-the-counter transactions soared 13% to USD 272 billion daily, outpacing the 2025 average.

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According to a report by the World Gold Council (WGC), global gold ETFs lost USD 6.77 billion between January and June of 2024, making this year’s H1 the worst since 2013.

While Asia turned out to be the only region with inflows, several markets, especially in North America and Europe, saw heavy outflows.

Nonetheless, recent inflows and a significant rise in the price of gold have caused the total assets under management (AUM) of gold-oriented exchange-traded funds (ETFs) to increase by 8.8% year to date.

During that time, total holdings decreased by 120 tonnes (or 31.9%) to 3,105 tonnes, which is significantly less than the monthly high of 3,915 tonnes that was recorded in October 2020.

Top Performer

Asia was the only major market to record positive flows in the first half of the year, with inflows totalling USD 31 billion, exceeding all other markets. This was largely due to the region’s strong gold performance in major currencies and the weak value of non-USD currencies, which attracted a lot of investors.

However, the combined outflows from North America and Europe totalled USD 9.8 billion.

“Western gold ETF investors did not react as anticipated to the rise in the gold price – which commonly drives up investment flows – amid a high level of interest rates and a more risk-on sentiment generated by the AI boom,” the report said.

June Inflows

Globally, gold ETFs received USD 1.04 billion in inflows in June 2024; all regions saw gains, except North America.

Funds in other regions saw a slight inflow of USD 37 million, with Australia and South Africa leading the way. Other regions experienced mild outflows during the month.

The aggregate holdings of gold ETFs increased further, and their total assets under management (AUM) stayed steady at USD 233 billion.

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