Global Gold ETFs See $2 Billion Outflow in May Amid Shift to Tech Stocks

Global gold exchange-traded funds (ETFs) experienced a significant downturn in May, with investors withdrawing $2 billion. This outflow marks an end to the strong inflows seen in the first quarter and indicates a shift in investor sentiment towards riskier assets like technology stocks.

The World Gold Council's latest report highlights Asia and North America as the primary drivers of this withdrawal. Asia saw its first monthly net outflow since August 2025, totaling $1.2 billion, with China being the largest contributor. North America also faced pressure, with outflows of approximately $1.1 billion, influenced by a strengthening dollar, persistently high U.S. interest rates, and revised expectations for Federal Reserve rate cuts.

In contrast, Europe emerged as the sole region with net inflows, attracting $334 million. This positive trend was mainly supported by markets in the United Kingdom and Germany. The report suggests that the recent selling pressure on gold ETFs is linked to the metal's price stagnation at high levels. Without new catalysts, investors are adopting a wait-and-see approach.

The shift in investment strategy is further evidenced by the significant net inflows into technology stock ETFs, which reached their highest monthly level this year. This has diverted capital that might otherwise have flowed into gold. Additionally, as macroeconomic themes that were heavily bet on in the first quarter have largely materialized, some fund managers are reallocating capital to growth assets like technology stocks to improve performance. The reduced sensitivity to geopolitical risks has also diminished gold's appeal as a safe-haven asset.