Net holdings in physically-backed gold exchange-traded funds (ETFs) plummeted by nearly 80 percent from the beginning of the year to May 8, with outflows continuing for the third consecutive week, according to data released by the World Gold Council (WGC). Despite these trends, overall investments remained positive due to continued support from Asian investors. For the week ending May 9, net investments were negative at $629 million, as noted by the WGC.
As of May 8, total investments in ETFs stood at $69 billion, with exits amounting to $50.01 billion, resulting in a net inflow of $18.93 billion. The data indicated that North America was primarily responsible for the outflows, which reached $1.29 billion. Conversely, Asian investors drove the inflow, contributing $16.16 billion, with Europe following at $3.66 billion.
In country-specific figures, the United States experienced the highest exits at $1.72 billion, while China ($9.23 billion) and India ($3.55 billion) were the leading nations for investments in ETFs. Other countries recording positive investments included the United Kingdom ($2 billion) and Switzerland ($1.89 billion).
This current development contrasts sharply with the beginning of 2025, which saw positive net inflows of $88.91 billion, driven by investments totaling $167.18 billion against exits of $78.27 billion. For the week ending May 1, ETF investments reached $2.03 billion against $2.40 billion in exits. In the following week, inflows were reported at $1.18 billion, while $1.43 billion was withdrawn from ETFs.
India and Italy were at the forefront of ETF inflows in the week ending May 1, contributing $292.4 million and $129.3 million, respectively, followed by the UK with $98.8 million and Singapore with $15.7 million.
In the most recent week, the highest outflows were again from the United States, totaling $780.4 million, while China recorded outflows of $130.5 million. The previous week’s data from Indian investors has not yet been disclosed, although Chinese investors added $241.1 million in inflows. Other contributors included the UK ($95 million), Canada ($80.3 million), Germany ($48 million), and Ireland ($24.8 million), with renewed investments from Singapore and Hong Kong.
The decline in ETF holdings has been linked to falling gold prices, which dropped following the onset of the Iran war on February 28. Gold prices had reached an unprecedented high of $5,608 an ounce on January 29 before entering a downward trend.
As of now, gold is quoted at $4,700 per ounce. The precious metal’s previous gains have been hindered by concerns over a potential interest rate hike by the U.S. Federal Reserve, inflation, slowing economic growth, and a shift in investor focus toward crude oil futures. The price of gold surged in response to interest rate cuts by the Fed, fueled further by geopolitical tensions and trade disputes.
In addition to ETF outflows, central banks have also started selling gold, with WGC data indicating they were net sellers in March.
