Investments in physically-backed gold exchange-traded funds turned negative again this week, with US and Chinese investors leading the exits from the funds, data from the World Gold Council (WGC) showed.

It is for the second consecutive week that inflows in Asia, particularly China, were negative. Outflows from the US and China were over $600 million at $635 million and $623 million, respectively. 

The WGC data showed that inflows last week into the ETFs were $1.09 billion, while outflows were $2.17 billion. For the year-to-date period, net investments were down to $18.46 billion from $19.54 billion the previous week.

Down since surging to record

Exits from the ETFs resumed as gold prices dropped below $4,600 an ounce last week, and the yellow metal has lost nearly 3 per cent on the month. Gold ETFs have been witnessing higher outflows after the Iran war broke out.

Gold hit a record high of $5,608 an ounce on January 29. Since then, it has been on a downward trend, shedding 19 per cent. On Monday, gold was quoted at $4,560 an ounce. 

 Last week, outflows in North America were $617.5 million, and in Asia, they were $629.4 million. Europe saw inflows to the tune of $211 million, while other regions witnessed an outflow of $43.3 million.

US outflows surge

Apart from the US and China, other countries to see investors exiting were: Australia ($28.1 million), France ($20.2 million), South Korea ($12.1 million) and Turkey ($15.2 million). Data on Indian investments were not available.

Year-to-date, net investments in the US continued to be negative, rising to $1.56 billion from $925.2 million. In the UK, inflows continued to be positive at $2.13 billion, while they were up at $1.90 billion in Switzerland.

Investments in China were down to $8.20 billion (down from $8.83 billion last week). In China, net investments were $1.26 billion, while they were $0.93 billion in Special Administration Region of Hong Kong. 

Why the fall

In terms of tonnage, ETFs hold 4,130.7 tonnes of the yellow metal compared with 3,540.5 tonnes a year ago. However, they were down from 4,319.4 tonnes the previous week.

The precious metal has traversed southwards since the Iran war broke out on fears of inflation, a hike in interest rates and rising bond yields. From 2024 till January 29 this year, the yellow metal witnessed a continuous rally on hopes of a rate cut by the US Fed, the US trade dispute with other countries and geopolitical crises. 

Published on May 25, 2026