The outflows were the highest as of date this year and followed exits to the tune of $2.71 million in the week ending June 5.  | Photo Credit: istock.com

Investors chose to encash $4 for every dollar invested in physically-backed gold exchange-traded funds (ETFs) last week, as investments continued to witness net negative inflows for the fifth week in a row, data from the World Gold Council (WGC) showed. 

The outflows were the highest as of date this year and followed exits to the tune of $2.71 million in the week ending June 5. 

Investors in the US led the outflows, encashing over $1.5 billion, while those in the UK ($587 million), Germany ($471 million), China ($359 million), France ($347 million), Japan ($332 million) and Switzerland ($160 million) joined the downtrend. Canada, however, witnessed $358 million in inflows. Data relating to India was not available. 

2 opposing forces

According to WGC, inflows into gold ETFs were $850.4 million, while outflows were $4.27 billion. Investors were expected to press the exit button last week as gold dropped below $4,200 an ounce. It recovered after the US and Iran agreed to pause their conflict and sign an agreement.

Renisha Chainani, head of research at Augmont, said precious metals were caught between two powerful opposing forces last week — a developing US-Iran peace framework that steadily unwound geopolitical risk premium, and a wave of inflationary data that revived rate-hike fears. 

“The combined effect delivered a second straight weekly decline for gold, though late-session buying in the latter part of the week limited the damage,” she said. 

On Tuesday, gold ruled near $4,320 an ounce, adding to the over one per cent gained in the past week. The precious metal had surged to a record high of $5,608 an ounce on January 29, before beginning to drop after the US-Iran war broke out on February 28. Since then, the yellow metal has dropped nearly 23 per cent. 

YTD investments drop

Year-to-date, investments in gold ETFs dropped to $11.87 billion as of June 12, compared with $15.28 billion the previous week. Investors in North America have turned bearish, with net inflows being negative at $4.62 billion. In Europe, net inflows were $2.77 billion, while Asia was primarily responsible for net inflows being positive till now. China has a net inflow of $7.29 and India $3.48 billion. 

Country-wise, US investors have exited to the tune of $3.81 billion. Net inflows in Italy and France were negative at $208 million and $174 million, respectively. 

After India and China, the UK’s investments in gold ETFs were positive at $2.42 billion. Switzerland’s inflows were net positive at $1.82 billion, followed by Japan ($1.26 billion), Hong Kong Special Administrative Region ($951.5 million), South Korea ($851.6 million) and Canada ($330 million). 

Exits from SPDR gold shares were to the tune of $859.5 million, and in IShares Gold Trust, they were $595 million. 

Tonnage slips

In terms of tonnage, ETFs hold 4,080,10 tonnes (4.106.3 tonnes a week ago). They were, however, higher than 3,583.7 tonnes a year ago. 

Gold prices have dropped on concerns over inflation, hopes of a hike in bank interest rates, rising bond yields, and fears of global economic growth. A rise in crude oil prices encouraged investors to shift to the fossil fuel complex from precious metals, besides an uptick in agricultural commodities.  

The yellow metal witnessed a dazzling rally between 2024 and February 2026 as it was seen as a haven asset due to interest rate cuts by central banks, geopolitical crisis and US tariff wars with various countries.  

Published on June 16, 2026