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Global gold-backed exchange-traded funds (ETFs) endured their first outflow for five months in May as demand for riskier assets improved, latest World Gold Council (WGC) data shows.
Total outflows came in at 19 tonnes and had a value of $1.8 billion, the body said. This pulled total physical holdings down to 3,541 tonnes.
The WGC said that “North America took the largest hit, and Asia reversed the strong momentum it experienced in April.”
It added that “funds in other regions experienced a small loss for the first time in six months,” though mind inflows into European funds continued.
Inflows and outflows experienced by gold ETFs since mid-2023.
Depressed further by the falling gold price, total assets under administration (AUMs) in bullion ETFs dropped to $374 billion in May from a record $379 billion the previous month.
Gold fund inflows hit three-year peaks in April as market interest in safe-haven assets ignited. Yellow metal prices have since retreated from record highs above $3,500 per ounce in late April and were last at $3,384.
Despite May’s reversal, ETF flows remain positive for the year to date, the WGC noted. Inflows have totaled $30 billion since the start of 2025, while physical holdings have risen by 322 tonnes.
North American Weakness
In North America, funds endured their first negative month since January last month, according to the WGC.
Holdings contracted 16 tonnes over the month to 1,813 tonnes. Outflows were valued at $1.5 billion, reducing regional AUMs to $191 billion.
The organization said that “the better-than-expected temporary easing of tariffs between the US and China improved investor risk appetite, which led to a strong rebound in equities, but lower safe-haven demand for gold.”
It added that “the market is now expecting higher rates by the end of 2025, leading to rising US Treasury yields and increasing the opportunity cost of holding gold.” This follows recent Federal Reserve minutes that showed the central bank is taking a more measured approach to future interest rate cuts.
Falls Elsewhere
Meanwhile, Asian-located ETFs endured their first monthly reversal since November thanks to a $489 million outflow.
Physical holdings dipped by five tonnes, to 315 tonnes. Cumulative AUMs reversed to 34 tonnes.
According to the WGC, “China led outflows as safe-haven demand diminished amid de-escalating trade tensions with the US and subsequent equity rebounds.”
However, the body added that Japanese funds continued to increase, registering their eighth monthly inflow on the spin.
Funds in other regions (excluding Europe) experienced a fall of less than half a tonne, resulting in month-end holdings of 70 tonnes. Outflows of $27 million slimmed AUMs to $7 billion, chiefly due to liquidations in Australia and South Africa.
Europe Shines
ETF activity in Europe bucked the broader trend, with holdings edging higher by two tonnes in May to 1,343 tonnes.
Inflows were worth $225 million, pulling total AUMs to $142 billion. But continental performance was mixed, with the WGC commenting that “inflows in France more than offset continued outflows from Germany and the UK.”
It said that “sluggish economic growth and weakening consumer sentiment; the Trump administration’s escalation of tariff threats which attracted gold ETF inflows across Europe in late May; and intensifying fiscal concerns and political instability” all drove French gold demand last month.
