Data from the World Gold Council indicates that in May, global gold ETF demand was subdued as investors largely adopted a wait-and-see approach. This was driven by range-bound gold prices and a renewed preference for riskier assets. Following a significant rebound in April, global physically-backed gold ETFs saw a modest outflow of approximately $2 billion in May. Europe stood as the sole region to record net inflows. However, on a year-to-date basis, global gold ETFs have maintained a net inflow position, accumulating nearly $17 billion. Due to the May outflow and weaker gold prices, the total assets under management for global gold ETFs decreased by 2% month-on-month to $604 billion. The total holdings saw a slight decline of 0.4% to 4,121 tonnes, just below the historical peak reached in February. Market liquidity for gold remained ample, with trading volumes edging higher month-on-month and staying above the 2025 average.

North America

In May, North American gold ETFs shifted to a slight net outflow of around $1.1 billion. The reasons are as follows: Since gold prices corrected and entered a consolidation phase in March, fund flows in the region's ETFs have been relatively sluggish, with investors stepping back to await clearer catalysts. A stronger US dollar, rising interest rates, and adjustments to market expectations for the US rate path have increased the opportunity cost of holding gold. Inflation concerns related to US-Iran tensions have added to uncertainty around the interest rate outlook. After the first quarter, investors who missed the rally or needed to catch up to benchmark performance rotated back into risk-on sectors like technology. This sector rotation was pronounced, with global tech stock ETFs recording their largest monthly inflow since early 2024 in May, overshadowing gold ETFs. Despite lingering concerns about a stock market bubble, investor interest in gold ETFs is unlikely to surge significantly in the near term. A renewed demand for gold as a safe haven would likely require a decline in risk appetite and a broad-based flight to safety.

Europe

In May, Europe was the only region globally to achieve net inflows into gold ETFs, with an inflow of approximately $334 million. Demand from the UK and Germany offset outflows from other parts of Europe. In the UK, domestic political uncertainty and market concerns over government fiscal health supported safe-haven demand for gold. In the latter half of May, falling inflation and declining oil prices pushed UK government bond yields lower, reducing the opportunity cost of holding gold and further boosting local gold ETF demand. In Germany, falling oil prices eased concerns about further monetary tightening by the European Central Bank, leading to lower German bond yields and supporting gold demand. Outflows were seen from currency-hedged gold ETFs in places like Switzerland, primarily due to the strengthening of local currencies against the US dollar during the month.

Asia

In May, Asian gold ETFs recorded their first monthly net outflow since August 2025, with outflows reaching $1.2 billion. This outflow trend was almost entirely driven by the Chinese market. Weaker domestic gold prices, a stronger Renminbi, and sustained investor optimism towards the stock market collectively dampened demand for gold ETFs. The Indian market saw gold ETF outflows of about $61 million, ending a 12-month streak of consecutive net inflows. Notably, most of the gold ETF outflows in May occurred after news of an import tariff hike, as rising domestic gold prices prompted investors to take profits.

Other Regions

In May, gold ETFs in other regions recorded a minor outflow of about $14 million. Outflows from Australia offset inflows from countries like South Africa.

Gold Trading Activity Sees Slight Increase

In May, the global gold market's average daily trading value reached $424 billion, up 3% month-on-month and higher than the 2025 daily average of $368 billion. This indicates that overall gold market liquidity remained ample despite the range-bound price action. The average daily over-the-counter trading value increased by 1% to $243 billion, significantly above the 2025 daily average of $180 billion. Trading volume on global exchanges was $175 billion, up 6% month-on-month. This increase was primarily driven by higher trading volumes for COMEX gold futures, partially offset by a decline in trading volume on the Shanghai Futures Exchange. The average daily trading value for global gold ETFs fell significantly by 26% to $6 billion, below the 2025 average of $7 billion.

In May, the total net long position in COMEX gold futures decreased by 2.5% to 466 tonnes. Breaking down the positioning, managed money positions increased in three out of the four weeks in May, accumulating a gain of 17 tonnes. However, selling from other reportable positions led to an overall reduction of 29 tonnes in the net long position. Non-reportable positions, often associated with individual investors, followed a similar trend, decreasing by approximately 12 tonnes. Overall, short-term investors are still waiting for clearer market catalysts. Gold futures positioning hovers in a neutral range, and the long-term fundamental landscape for the gold market remains unchanged.