Industry body the World Gold Council reports that global investors have continued to reduce their exposure to physically backed gold exchange-traded funds (ETFs) in June, but inflows for the first half of the year remained positive.

Global gold ETFs in assets under management (AUM) reached $526-billion at the end of June, with a 6% fall in the first half of the year, mainly owing to a lower gold price.

Collective gold holdings, however, were up in the first half by 18 t to 4 047 t.

Global gold ETFs recorded net outflows of $8.9-billion during June, with funds listed in every region experiencing investor withdrawals, as North America accounted for the largest share of the outflows.

Asia led global demand, recording its strongest first-half inflows on record, while Europe also posted healthy inflows.

North America was the only region to record net outflows over the six-month period, and although AUM declined by 6% during the first half, mainly owing to lower gold prices, total holdings still increased by 18 t.

The council attributes North America's weak performance to a combination of lower gold prices and changing expectations for US interest rates. The region recorded outflows of $5.5-billion in June, taking first-half outflows to $7.7-billion, the weakest first-half performance since 2013.

“The notable gold price pullback in the month served as a key driver for investors to dial back their allocation to gold ETFs. As new [US Federal Reserve] chairperson Kevin 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,” the council notes.

At present, the council expects flows into North American gold ETFs to stabilise during the second half of the year. While its base-case outlook points to relatively steady gold prices, it believes that continued geopolitical tensions, economic uncertainty and financial market risks could continue supporting demand for gold as a safe-haven asset.

European funds recorded outflows of $818-million in June, reducing first-half inflows to $3.2-billion. In this regard, the Council comments that weaker gold prices have encouraged investors to take profits, while the European Central Bank's (ECB) decision to increase interest rates by 25 basis points also weighed on investor demand.

Asia recorded its largest monthly outflow on record in June, with investors withdrawing $2.3-billion. However, the region still delivered the strongest first half in its history, attracting net inflows of $12-billion.

Most of the June outflows came from Chinese funds as improving equity markets and lower gold prices have reduced demand for the precious metal, and Japanese funds also experienced outflows after the Bank of Japan raised interest rates.

However, the council also highlights that investors in India continued to buy gold ETFs as they viewed the lower gold price as an opportunity to increase their holdings.

Funds in other regions posted relatively modest outflows of $262-million in June. Australian funds recorded withdrawals of $197-million, while South African funds lost $36-million, trimming year-to-date inflows.

Meanwhile, activity across the global gold market remained strong despite easing in June as the average daily trading volumes declined by 13% month-on-month to $373-billion a day, reflecting lower activity in over-the-counter and exchange-traded markets.

Further, the average daily trading volumes reached a record $488-billion during the first half of 2026, supported by strong institutional participation and increased investor interest in gold amid ongoing macroeconomic and geopolitical uncertainty.

“Looking ahead, regional gold ETF flows could stabilise. The macro consensus scenario in our 2026 Mid-Year Gold Outlook suggests relatively stable gold performances in the second half, with potential catalysts possibly brewing a breakout in other scenarios.

“Meanwhile, uncertainties surrounding geopolitics, economic growth and financial markets linger. This backdrop may continue to support investor demand for portfolio protection and sustain interest in gold ETFs as a strategic safe-haven allocation,” the council says.