Gold ETFs defy March outflows to extend quarterly inflow streak

Holdings recorded their largest monthly decline since September 2022 in March but still rose by 62t over Q1. Despite the pullback in the gold price, global gold ETFs ended the quarter with US$606bn in assets under management (AUM), 9% above FY25 levels. Notably, Asia posted its largest quarterly inflow on record, with positive flows in March helping to offset weakness elsewhere.

• Broader risk‑off conditions, triggered by Operation Epic Fury[2] , weighed on most asset classes – except oil – and likely prompted US investors to raise liquidity by selling prior winners such as gold
• Commodity Trading Advisors (CTAs) entered mid-March with elevated long positioning and appear to have amplified the downside price momentum, forcing weaker hands to capitulate[3]
• Opportunity costs rose as the US dollar and interest rates moved higher, while rate expectations shifted materially from potential cuts in 2026 to rates now expected to remain unchanged through September 2027[4], adding uncertainty and weighing on gold demand.

Even so, flows recovered quickly, with the region adding US$8bn over the subsequent 12 months. A similar pattern followed the GFC, when the end of the inflow streak was followed by US$16bn of net inflows over the next year, including inflows in nine of those months.

At the same time, inflation concerns linked to geopolitical tensions in the Middle East led the European Central Bank to hold rates steady in March while signalling a willingness to hike should inflation accelerate[5]. Rising inflationary pressures and a more hawkish policy stance pushed regional yields higher, increasing local investors’ opportunity costs of holding gold. Meanwhile, the euro’s depreciation against the dollar exacerbated losses in FX‑hedged products, particularly in Switzerland, further weighing on regional flows.

Funds in other regions recorded modest outflows of US$27mn – trimming Q1 inflows to US$285mn – largely driven by Australia. Despite heightened gold price volatility, Australian and South African holdings remained relatively resilient, with only minimal outflows during the month.

Global gold market trading volumes[7] rebounded in March, averaging US$525bn, 11% higher m/m. Despite the sharp price pullback during the month, liquidity remained ample across all market segments. Over‑the‑counter (OTC) trading activity rose 13% to US$272bn per day, well above the 2025 average of US$180bn. Exchange volumes also increased, up 10% to US$238bn per day, with activity rising on COMEX while volumes on the Shanghai Futures Exchange moderated. Meanwhile, despite a 10% m/m decline, global gold ETF liquidity remained robust at US$15bn per day, more than double the 2025 average.

(See the disclaimer section below for the footnotes)

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