Gold ETF Inflows Halved by Record-Breaking March Outflows: Report

Record March outflows of USD 12 billion, led by North American investors, halved Q1 2026 global gold ETF inflows. Despite the pullback, it was the 7th quarter of net inflows, buoyed by record Asian buying, a World Gold Council report found.

Record-breaking outflows in March, primarily driven by North American investors, halved global inflows into physically backed gold ETFs for the first quarter of 2026. According to a report by the World Gold Council, March saw a hefty USD 12 billion exit from the market, representing the largest monthly outflow on record.

Before this volatility, global gold ETFs were positioned for their strongest quarterly performance to date. Despite the sharp March pullback, the market still secured its seventh consecutive quarter of net inflows, with total assets under management ending at USD 606 billion.

Asian Markets Counterbalance Western Sell-Off

In contrast to the Western sell-off, Asian markets provided a significant counterbalance as the region posted its strongest quarterly inflow on record, adding USD 14 billion in the first three months of the year. China led these additions, fueled by heightened safe-haven demand amidst falling local equity markets and a weakening currency. Indian investors also contributed to the trend, adding USD 177 million in March to bring their quarterly total to USD 3 billion.

"Asian gold ETFs added USD 2bn in March, marking a seventh consecutive month of inflows and lifting Q1 inflows to USD 14bn, the strongest quarter on record," the report noted.

Factors Driving North American Outflows

The report attributed the North American weakness to several factors, including broader risk-off conditions, which likely prompted investors to liquidate winning positions like gold to raise liquidity. Additionally, rising opportunity costs linked to a stronger US dollar and shifted interest rate expectations, "with rates now projected to remain unchanged through September 2027," weighed heavily on regional demand.

Historical data show that similar nine-month inflow streaks occurred only during the Global Financial Crisis and the COVID-19 pandemic, both of which were followed by sharp reversals.

"North America recorded sizeable outflows of USD 13bn in March, ending a nine-month streak of inflows. Selling pressure persisted throughout the month and marked the largest monthly outflow on record, leaving North America as the only region to post net outflows in Q1," World Gold Council stated.

Modest Outflows from European Funds

European funds saw modest outflows of USD 154 million in March, which reduced the region's total quarterly inflows to just USD 27 million. The World Gold Council observed that these flows closely tracked price movements, with sales led by Germany, Italy, and France. A hawkish stance from the European Central Bank and rising regional yields further increased the opportunity costs for local investors, while the euro's depreciation against the dollar exacerbated losses in Switzerland.

Global Market Liquidity Remains Robust

Even with the price correction, global market liquidity remained robust throughout the period. Daily trading volumes averaged USD 525 billion in March, an 11 per cent increase from the previous month. Over-the-counter activity rose 13 per cent to reach USD 272 billion per day, which remains significantly above the 2025 average. (ANI)

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