Investors retreat from gold ETFs as central bank hawkishness bites

North American funds served as the primary engine for this decline, shedding 42.4 tonnes worth $5.5 billion. Analysts at the World Gold Council attribute the sell-off to hawkish signals from Fed Chair Warsh and inflationary pressures linked to the US-Iran conflict. These factors bolstered the dollar and pushed gold prices below their 200-day moving average, testing the $4,000 psychological support level.

European and Asian markets mirrored this trend, though for distinct regional reasons. European holdings dropped by 12.1 tonnes, pressured by the European Central Bank’s 25 basis point rate hike and local currency depreciation. In Asia, outflows totaled 71.5 tonnes, driven largely by Chinese investors shifting capital toward equity markets and the Bank of Japan’s decision to increase rates. Despite the June retreat, the global market remains net positive for the first half of the year, with 17.6 tonnes in inflows. The World Gold Council projects a stabilization phase, suggesting that current price levels may attract opportunistic buying as geopolitical and economic uncertainties persist through the second half of 2026.