Gold ETFs saw record outflows in March as U.S. investors sold, but Asian funds kept buying

Gold ETFs lost $12 billion in value in March as investors, particularly in North America, rushed for the exits. The 84.8-tonne outflow marked the largest monthly dollar outflow on record, driven by a sharp reversal in sentiment among U.S. investors. North American funds alone shed $13 billion in gold, or 87 tonnes, snapping a nine-month streak of inflows. That selling pressure outweighed gains elsewhere, even as Asian ETFs added 9.9 tonnes — worth $2 billion — during the same period.

The World Gold Council identified three forces behind the North American pullback: risk-off conditions following Operation Epic Fury, momentum-driven selling by Commodity Trading Advisors with elevated long positions, and rising opportunity costs as higher interest rates and a stronger dollar made non-yielding gold less attractive. Rate expectations now point to no cuts through September 2027, increasing uncertainty and further dampening demand.

European funds followed the sell-off, shedding 7.3 tonnes valued at $154 million, with Germany, Italy, and France leading the outflows as prices dipped in late March. But in Asia, flows held positive until the final week. Chinese investors, facing geopolitical tensions, weakening equities, and a softer currency, continued piling into gold as a hedge. Indian funds added $177 million in holdings, while Australian and South African ETFs saw only minimal outflows despite volatility.

Despite the worst monthly outflow in dollar terms, global gold ETFs ended the first quarter with $606 billion in assets under management — 9% above FY25 levels. The divergence underscores a geographic split in risk perception: where Western investors treated gold as a prior winner to be sold, Asian investors treated it as a shelter to be acquired.