Global Gold ETF Inflows Turn Negative After 13 Weeks as Prices Drop

Investments in physically backed gold exchange-traded funds (ETFs) turned net negative after 13 weeks, following a 4% decline in the price of the yellow metal last week, according to data from the World Gold Council (WGC).

Data released by the WGC showed that investors worldwide redeemed $3.01 billion, while total investments stood at $1.80 billion. US investors led the redemptions, encashing $1.7 billion as gold prices fell below $4,000 an ounce. At 1930 hours on Monday, gold dropped to $3,995 an ounce, shedding earlier gains.

Renisha Chainani, Chief Research Officer at Augmont, noted that the sell-off was driven by oil, currency rates, and forced selling. Houthi strikes on Saudi infrastructure pushed Brent crude above $116, which markets interpreted as inflationary and raised December rate hike expectations to 78 per cent. Gold posted its worst week since June.

Darshan Desai, CEO of Aspect Bullion & Refinery, stated that gold prices remain under pressure due to a stronger dollar, rising bond yields, and inflation concerns, adding that the upcoming US Federal Reserve meeting will be crucial in determining near-term price trends.

Despite the broader downturn, some regions saw positive inflows. The UK led positive inflows at $321.8 million, followed by Switzerland at $64.3 million, Germany at $45.8 million, and China at $21.4 million. On a year-to-date basis, China leads the table with $10.43 billion in investments, followed by the UK at $10.22 billion. Indian investors ranked third with inflows of $4.69 billion, although data for last week was unavailable.

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, observed that gold continues to hold around $4,000 despite easing geopolitical tensions, supported by strong investment and central bank demand, fiscal concerns, and moderation in Treasury yields. However, he noted that psychological barriers, central bank buying, and sentiment ahead of the US Fed meeting and mid-term elections are keeping market participants on edge.

Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd and President of India Bullion and Jewellers Association Ltd, indicated that central bank buying and Indian ETF inflows continue to offer support to the metal. He added that Dhanteras and Diwali demand should cushion dips, favoring staggered buying near support ahead of the Fed decision.

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, pointed out that elevated crude oil prices and expectations of a possible US rate hike continue to support the dollar, keeping bullion under pressure.

Gold previously rallied between 2024 and January 2026, driven by US Fed rate cut expectations, geopolitical tensions, and trade friction. However, the metal has dropped over 25 per cent since reaching a record high of $5,608 an ounce on January 29, heavily impacted by the outbreak of the Iran war, inflation fears, and a shift in investor focus toward crude oil.

"This shift in global gold ETF inflows highlights how macroeconomic factors like crude oil prices, currency fluctuations, and central bank policies directly influence investor behavior across markets. For businesses, entrepreneurs, and investors monitoring global commodities, such shifts serve as an important reminder to maintain diversified portfolios and closely track monetary policy decisions, especially during periods of geopolitical and economic uncertainty." — Dr. Shishir Gupta, Founder & CEO, StartupLanes