Investors pulled a net $3.42 billion from physically-backed gold exchange-traded funds (ETFs) last week, marking the fifth straight week of net negative inflows, according to data from the World Gold Council (WGC). The outflows were the highest as of date this year, following $2.71 million in exits the week ending June 5. On Tuesday, gold ruled near $4,320 an ounce, adding to over one per cent gains in the past week, after the precious metal had dropped below $4,200 an ounce at the start of the exit wave.
Outflows Persist for Fifth Week
According to the WGC, inflows into gold ETFs were $850.4 million, while outflows totalled $4.27 billion, meaning investors chose to encash $4 for every dollar invested. The outflows were led by the US, where investors encashed over $1.5 billion. Other major contributors included the UK ($587 million), Germany ($471 million), China ($359 million), France ($347 million), Japan ($332 million) and Switzerland ($160 million). Canada was the exception, with $358 million in inflows. Data relating to India was not available for the week.
Year-to-Date Investment 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, according to the WGC. North America has turned bearish, with net inflows negative at $4.62 billion. In Europe, net inflows were $2.77 billion, while Asia was primarily responsible for net inflows remaining positive. Country-wise, US investors have exited to the tune of $3.81 billion year-to-date. China has a net inflow of $7.29 billion and India $3.48 billion. 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 $859.5 million, and from iShares Gold Trust, $595 million.
Tonnage Slips
In terms of tonnage, ETFs hold 4,080.10 tonnes, down from 4,106.3 tonnes a week ago, but higher than 3,583.7 tonnes a year ago, the WGC reported.
Price Drivers and Outlook
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. Gold 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%.
The WGC data shows that 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.
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