The World Gold Council (WGC) reported that gold-backed exchange-traded funds (ETFs) posted a net outflow of 19.1 tons ($1.83 billion) in May, marking the first monthly withdrawal in five months. Analysts say the shift reflects heightened volatility in financial markets.
North American funds led the outflows, with $1.5 billion withdrawn, reflecting investor concerns over volatile US trade policies. The temporary easing of tensions between Washington and Beijing further diminished gold's appeal as a safe-haven. The WGC noted that this shift drove money into riskier assets instead.
Nevertheless, the firm anticipates that ongoing economic uncertainty from global trade tensions will continue to support gold prices. While the Federal Reserve's neutral monetary policy may limit the metal’s gains in summer, the WGC emphasizes that inflation concerns and record-high US government debt could partially offset this effect.