March 2026 witnessed record-breaking outflows in physically backed gold ETFs, primarily led by North American investors, slashing global inflows by half, according to the World Gold Council’s recent report. The month saw a staggering USD 12 billion exit, marking the largest monthly outflow on record. Despite the turbulence, the market managed to secure its seventh consecutive quarter of net inflows, with total assets under management reaching USD 606 billion.
Contrasting with North America’s sell-off, Asian markets experienced unprecedented inflow levels. The first quarter saw the region’s strongest influx ever, adding USD 14 billion, driven mainly by China’s safe-haven demand amid declining local equities and a weakening currency. Indian investors also contributed, bringing their quarterly total to USD 3 billion. March alone marked a USD 2 billion addition for Asian gold ETFs, noted as the most robust quarter on record.
The report cites a combination of risk-off conditions in North America as culprits for the outflows, including liquidating profitable gold positions to enhance liquidity. The stronger US dollar and stagnant interest rate projections through September 2027 further impacted demand. Notably, prolonged inflow periods like this were historically only seen during major financial crises, followed by sharp market reversals.
North America’s monumental USD 13 billion outflow in March ended a nine-month streak of inflows, making it the sole region to witness net outflows in Q1. Meanwhile, European funds experienced modest outflows of USD 154 million, trimming the region’s quarterly inflow to a mere USD 27 million. European sales, driven by Germany, Italy, and France, closely correlated with price shifts.
Further pressuring European markets, the European Central Bank’s hawkish tone and increasing regional yields augmented local investors’ opportunity costs, while euro depreciation intensified Swiss losses. Despite these setbacks, global market liquidity remained sturdy, with March’s daily trading volumes averaging USD 525 billion—a notable 11% rise from February. Over-the-counter transactions soared 13% to USD 272 billion daily, substantially outpacing the 2025 average. (ANI)
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