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Informist, Thursday, Jun. 4, 2026

NEW DELHI – India recorded a net monthly outflow of $61 million from gold exchange-traded funds in May, breaking a 12-month streak of inflows after New Delhi hiked import duty on gold last month, the World Gold Council said in a report. Globally, too, May saw funds trickle down from gold ETFs amid range-bound gold prices and renewed appetite for risk assets, it added. 

India saw outflows in May after the government on May 13 raised the import duty on gold to 15% from 6%, the steepest increase on record, to discourage imports and save foreign exchange reserves. "Gold ETFs experienced outflows following the import duty hike, with redemptions from 13-18 May largely reversing earlier gains," the council said, adding that investors redeemed funds to take profits from rising domestic gold price. 

Meanwhile, assets under management in global gold ETFs fell 2% on month to $604 billion in May, while holdings fell 0.4% to 4,121 tonnes. "After April's notable rebound in activity, global physically backed gold ETFs recorded modest outflows of $2 billion, with Europe as the only region to register inflows," the council said. However, for Jan-May, gold ETF flows remained positive, amassing nearly $17 billion, it added. 

In Asia, investors pulled out $1.2 billion from gold ETFS in May, the first monthly outflow since August 2025. "The decline was almost entirely driven by China, where weaker local gold prices, a stronger RMB, and sustained optimism toward equities weighed on gold ETF demand," the council said. 

Europe was the only region to register net inflows in May, with positive flows of $334 million. Inflows from the UK and Germany more than offset weakness elsewhere. "In the UK, safe-haven demand was supported by political uncertainty and concerns around the government's fiscal position," the council said, adding that softer inflation and easing oil prices also reduced the opportunity cost of holding gold. 

"A similar dynamic was visible in Germany, where lower oil prices eased concerns over future ECB tightening and helped pull bond yields lower, supporting gold demand," the council said. 

In North America, outflows were at $1.1 billion in May, as the opportunity cost of holding gold rose amid a strong dollar, higher bond yields, and adjusted expectations for the future path of US rates. In addition, investors shifted to riskier assets as global technology ETFs saw their largest monthly inflow since the beginning of 2024. 

"Investors who missed the upside or needed to keep pace with benchmarks appear to have rotated back into risk-on sectors such as technology. So far, markets seem to be paying little heed to the risk of a prolonged war in the Middle East," the council said. "While concerns over an equity market bubble persist, investors are likely to remain patient until risk-on momentum fades or a broader risk-off unwind prompts renewed safe-haven demand," it added. 

Meanwhile, the daily average trading volume across all gold markets rose 3% on month to $424 billion per day in May. Volumes remained 15% above the 2025 average of $368 billion per day, signalling ample gold market liquidity despite gold's recent range-bound performance, the council said.  End

US$1 = INR 95.79

Reported by Afra Abubacker

Edited by Avishek Dutta

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