ETFs globally added Gold in H1 despite selling in May and June

Despite significant outflows of metal in May and June, gold ETFs globally reported a net increase in gold holdings through the first half of 2026.

North American funds shed gold through H1, but every other region reported gold inflows through the first half of 2026. On net, ETFs globally added 17.6 tonnes of gold to their holdings from January through June.

Assets under management (AUM) by gold ETFs globally dipped to $526 billion in June, primarily due to a decline in gold prices. Through the first half of 2026, global gold ETF AUM dropped by 6 percent.

North American funds reported a 60.5-tonne decrease in gold holdings through H1 valued at $7.7 billion. It was the weakest first half for North American gold-backed funds since 2013.

North American fund reported outflows of 42.4 tonnes of gold in June alone. According to the World Gold Council, higher interest rate expectations are creating headwinds for gold, particularly in North America.

As new Fed Chair Warsh sent hawkish – as the market interpreted – signals and the US-Iran conflict pushed inflation fears up, expectations intensified of higher interest rates ahead. This anticipation contributed to rising real yields and a strengthening dollar, pushing up investors’ opportunity costs of holding gold.

In contrast, Asian gold ETFs had their best H1 on record, adding 69.7 tonnes of gold valued at $12 billion. This despite a 17.5-tonne metal outflow in June, the worst month on record.

According to the World Gold Council, June’s decline in Asian ETF gold holdings was primarily driven by Chinese selling. Equity gains, a bigger risk appetite, and a lower gold price have cooled the Chinese gold market in recent weeks.

European funds added 8.2 tonnes of gold in H1, valued at $3.2 billion. The market reported significant outflows totaling 12.1 tonnes in June. World Gold Council analysts say price weakness has driven net ETF sales over the last couple of months.

Meanwhile, the European Central Bank hiked interest rates by 25 basis points in June. It was the first ECB rate hike since September 2023.

Funds in other regions, including Australia and Africa, saw virtually no change in their gold holdings through the first half of 2026, reporting just a 0.2-tonne increase.

ETFs are a convenient way for investors to play the gold market, but owning ETF shares is not the same as holding physical gold.

ETFs are relatively liquid. You can buy or sell an ETF with a couple of mouse clicks. You don’t have to worry about transporting or storing metal. In a nutshell, it allows investors to play the gold market without buying full ounces of metal at the spot price. 

Since you are just buying a number in a computer, you can easily trade your ETF shares for another stock or cash whenever you want, even multiple times on the same day. Many speculative investors take advantage of this liquidity.

But while a gold ETF is a convenient way to play the price of gold on the market, you don’t possess any gold. You have paper. And you don’t know for sure that the fund has all the gold either, especially when it sees inflows. In such a scenario, there have been difficulties or delays in obtaining physical metal.

Trading volumes

Gold trading volumes decreased by 13 percent month-on-month in June to $337 billion per day.

Over-the-counter (OTC) activities also declined 13 percent to $214 billion per day. That remains well above the 2025 average of $180 billion per day.

Global gold market liquidity surged to a record $488 billion per day in H1. It was the strongest semi-annual average in the World Gold Council’s data. According to the WGC, strength was “broad-based,” with every major segment posting its most active semi-annual averages on record.

Despite the weaker gold price, total COMEX net longs rebounded by 16 percent month-on-month to 538 tonnes. That was the highest month-end level since January.  World Gold Council analysts said, “It is noteworthy that managed money net longs have been rising since early June despite a weakening gold price.”