Gold ETF Holdings Drop 30 Tonnes as Prices Rally 20% YTD
Gold rallied 20% YTD as ETF holdings fell by 30 tonnes last week, the largest weekly decline in over two years. Dollar weakness and rate-cut expectations underpin prices while central bank purchases and bar and coin demand drive the rally, overshadowing ETF inflows.
1. ETF Outflows Amid Rally
Gold has gained about 20% this year even as major bullion ETFs, including the iShares Gold Trust, shed roughly 30 tonnes of holdings in the past week, the largest weekly drop in over two years. This marks a clear departure from the typical inflow-driven rallies.
2. Dollar Weakness and Rate-Cut Bets
The U.S. dollar has weakened for three straight sessions while market consensus shifts toward Federal Reserve rate cuts later this year, enhancing gold's allure as a non-interest-bearing asset. Concurrent declines in crude oil prices have eased inflation pressures, reinforcing the metal's safe-haven status.
3. Broad Market Demand Sources
Beyond ETF flows, central banks have continued to accumulate reserves and bar and coin purchases contributed to global demand exceeding 5,000 tonnes in 2025. Hedge funds hold about 160,000 net-long gold futures contracts, near a two-year low, pointing to restrained speculative involvement.