Global gold exchange-traded funds saw net withdrawals of $1.8bn in May; AUM fell 1% to US$374 billion

Gold Rush seems to have hit a roadblock. After a five-month run of net inflows, global gold exchange-traded funds (ETFs) saw net withdrawals of $1.8 billion in May 2025, reports the most recent World Gold Council (WGC) data.

Global gold ETFs’ total assets under management (AUM) fell 1% to US$374bn amid the May outflow. Meanwhile, gold holdings lowered by 19 tonnes to 3,541 tonnes.

The first monthly outflow since last November and a mild fall in the gold price saw global gold ETFs’ total assets under management (AUM) fall 1% to US$374bn.

Despite May’s loss, global gold ETF flows have remained positive so far in 2025, at US$30bn. Holdings have also seen a cumulative rise of 322t during the period.

US gold ETFs have $183.4 billion, while Indian gold ETFs AUM is worth $7.2 billion.

Gold-backed ETFs and similar products make up a sizable portion of the gold market, with institutional and individual investors using them to carry out many of their investment strategies. Flows in ETFs frequently reveal short-term and long-term views and wants for gold.

North America took the largest hit, and Asia reversed the strong momentum it experienced in April. Europe registered mild inflows, while funds in other regions experienced a small loss for the first time in six months.

Global gold ETF flows flipped negative in May (-US$1.8bn): North America (-US$1.5bn) and Asia (-US$489mn) led outflows while Europe witnessed inflows (+US$225mn)

The US Fed maintained steady rates at its May meeting, citing inflation and labor market risks. The market expects higher rates by 2025, causing rising Treasury yields and increasing gold holding opportunity costs.

The demand for gold ETFs has historically been negatively impacted by increased US Treasury yields, but the recent trends are not necessarily bad news. For example, growing concerns about stagflation would push investors toward gold, which has historically done well in times of stagflation.

Investor worries about the sustainability of US debt have been rekindled by the recently proposed “One Big Beautiful Bill Act” and Moody’s recent downgrading of US sovereign credit. Additionally, when investors look for other safe havens, this may boost demand for gold even as it raises US Treasury yields through growing term premiums.

Last week, gold hit a one-month high as the Israeli-Iranian conflict intensified. It was anticipated that rising Middle Eastern geopolitical tensions would drive gold prices closer to a record high.

Gold prices may have remained subdued on Monday and Tuesday as a result of the US currency and bond rates being mostly unaffected.

Gold is under tremendous pressure at these levels and is only 3% away from reaching its all-time high price. Gold may see a surge if the Israel-Iran negotiations are unable to reduce tensions; if not, the yellow metal may see more declines. Gold prices may drop sooner than anticipated if the Middle East tensions cool off this week.