Buy in the East, sell in the West! The U.S. led global gold ETF declines in March, dragging down the market, while Asia set a quarterly inflow record.

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In March, global physical gold ETFs experienced the largest single-month net outflow in history. Massive sell-offs in the North American market almost cut the quarterly gains in half, while sustained buying in the Asian market partially offset the selling pressure from the West.

According to data released by the World Gold Council on April 8, global gold ETF net outflows in March reached as high as $12 billion, setting a record for the largest monthly outflow, which caused the quarterly net inflow to shrink by half compared to previous expectations.

Nevertheless, this marked the seventh consecutive quarter of net inflows. In the first quarter, global gold ETF holdings increased by 62 tonnes, with assets under management ending at $606 billion, up 9% from the full-year 2025 level. The trend of net inflows remained unbroken despite the sharp volatility in March.

Among them, the Asian market bucked the trend, recording net inflows of $14 billion in the first quarter, marking the strongest quarterly inflow ever, with China contributing about $8 billion. Continued buying in Asia effectively offset the selling pressure in Western markets, allowing the global inflow trend to persist.

Record Outflows in North America, Nine-Month Inflow Rally Abruptly Ends

North America was the main source of global gold ETF outflows in March. The region recorded net outflows of $13 billion in a single month, breaking historical records and ending a nine-month streak of consecutive net inflows, making it the only region with net outflows in the quarter.

The World Gold Council pointed out that multiple factors contributed to this wave of selling. The broad risk-off sentiment triggered by the US-Iran conflict impacted most asset classes, and US investors tended to sell previously appreciated assets (including gold) to supplement liquidity. Meanwhile, Commodity Trading Advisors (CTAs) held large long positions in mid-March, amplifying selling momentum during the gold price decline and forcing weak holders to passively close positions. In addition, a stronger US dollar, rising interest rates, and a significant revision in expectations for Fed rate cuts—from anticipated cuts in 2026 to now expecting rates to remain unchanged until September 2027—all increased the opportunity cost of holding gold.

Historically, North America has experienced more than nine consecutive months of net inflows only twice before—during the global financial crisis and the COVID-19 pandemic—both of which ended with abrupt reversals. It is noteworthy that the fourth to sixth largest monthly outflows on record occurred between November 2020 and March 2021 during the pandemic, but net inflows in the region rebounded quickly to $8 billion within the next 12 months; after the financial crisis, net inflows surged to $16 billion in a similar cycle.

Slight Outflows in Europe, Rising Opportunity Costs Suppress Demand

Europe saw net outflows of $15.4 million in March, reducing the quarterly net inflow to just $2.7 million. Germany, Italy, and France were the main sources of outflows for the month.

From a flow perspective, European fund movements closely followed gold price trends: Outflows were evident during the gold price decline in the second half of March, and small inflows occurred when gold prices rebounded at month-end.

On the fundamental side, the European Central Bank stayed put in March but signaled potential rate hikes if inflation accelerates. Geopolitical tensions raised inflation concerns and pushed regional yields higher, further increasing the opportunity cost of holding gold for local investors. Additionally, euro depreciation against the dollar worsened losses on FX-hedged products, with Switzerland notably affected, causing further drag on regional flows.

Seven Consecutive Months of Inflows in Asia, China and India Both Contribute

Asian gold ETFs recorded net inflows of $2 billion in March, marking the seventh straight month of positive inflows and propelling cumulative quarterly net inflows to $14 billion, a new all-time high for a quarter.

China was the main driver of inflows in Asia. Elevated geopolitical risks boosted safe-haven demand, with China's net inflow in Q1 reaching about $8 billion—accounting for the bulk of the region's total.

The Indian market likewise sustained its increase. Indian investors bought $177 million in gold ETFs in March, bringing quarterly net inflows to $3 billion, showing persistent growth in demand for gold allocations in the market.

Other regions (mainly Australia and South Africa) saw minor net outflows of $2.7 million in March, narrowing quarterly net inflows to $285 million, but overall holdings remained relatively stable amid heightened gold price volatility.

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