World Gold Council: Global gold ETFs turned to net outflows in May, with Asia and North America as the main sources of withdrawals.
After a strong rebound in April, the global gold ETF market cooled rapidly in May.
According to the latest report released by the World Gold Council on June 4th, global physical gold ETFs recorded a net outflow of $2 billion in May, marking a significant reversal in recent capital flows. As a result, global gold ETF total assets under management fell 2% month-over-month to $604 billion, with holdings slipping 0.4% to 4,121 tons, slightly below the record high of 4,176 tons set on February 27 this year.
This outflow was mainly driven by Asia and North America, which saw net outflows of $1.2 billion and $1.1 billion, respectively. Europe was the only region to report net inflows, attracting $334 million in May. Despite a single-month net outflow, global gold ETFs have maintained positive year-to-date flows, with cumulative net inflows close to $17 billion.
Gold prices stagnate as risk appetite rebounds; investors turn to the sidelines
Gold prices fluctuated within a range in May, lacking clear directional catalysts, prompting many investors to take a wait-and-see approach. Meanwhile, risk assets such as technology stocks began attracting funds again, with global technology ETFs recording the largest monthly net inflow since the start of 2024; gold ETFs were clearly at a disadvantage in asset allocation competition.
The World Gold Council pointed out that as gold and other macro consensus trades were realized in the first quarter, some investors who missed the rally or need to catch up to benchmark performance have shifted funds back to cyclical sectors such as technology. Currently, the market’s reaction to the continuous escalation of the Middle East situation is relatively muted, and safe-haven demand has not formed effective support.
North America: Rising opportunity costs suppress demand
North America turned slightly negative in May, with a net outflow of $1.1 billion. The report noted that since the gold price entered a consolidation phase after a correction in March, fund flows in the region have remained sluggish, showing investors are waiting for clearer entry signals.
In addition to price factors, the opportunity cost of holding gold is rising—due to a strengthening dollar, high interest rates, and adjustments to expectations for future Fed rate cuts, all of which are limiting demand for gold. Meanwhile, inflation concerns sparked by the US-Iran conflict have further increased uncertainty about the outlook for interest rates, with some market participants believing that the Fed may need to maintain a restrictive monetary policy stance for a longer time.
Asia: China leads outflows; India ends streak of inflows
Asian funds recorded the first monthly net outflow since August 2025, totaling $1.2 billion, with almost the entire decline coming from the Chinese market. The report indicated that weaker domestic gold prices, RMB appreciation, and ongoing optimism in the stock market together suppressed local gold ETF demand.
The Indian market also saw outflows, totaling $61 million, ending a previous 12-month streak of net inflows. Notably, most of India’s May outflows occurred after the announcement of higher import tariffs, with investors taking profits as domestic gold prices surged.
Europe: Safe-haven demand and falling bond yields provide support
Europe was the only region globally to record net inflows in May, attracting $334 million, mainly contributed by the UK and Germany, with their positive inflows offsetting weakness elsewhere.
In the UK, political uncertainty and concerns about government finances supported safe-haven demand; in the second half of the month, softening inflation data combined with falling oil prices pushed UK government bond yields lower, reducing the opportunity cost of holding gold and further boosting local ETF demand. German markets followed a similar logic—falling oil prices eased concerns about further ECB tightening, sending German government bond yields lower and supporting demand for gold. By contrast, currency-hedged products concentrated in Switzerland saw outflows due to local currency appreciation against the dollar.
Market liquidity remains high
Despite the shift to net outflows, overall market liquidity for gold remains robust. Daily average trading volume in the gold market in May edged up month-on-month to $424 billion, staying above the average for all of 2025, indicating that trading activity has not visibly weakened despite ETF outflows.
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