Investments in gold ETFs turn mixed as the precious metal turns volatile

Investments in gold-backed exchange-traded funds (ETFs) experienced mixed results over the past two weeks, with net inflows turning negative during the week ending November 6. Investors redeemed $2.72 billion, while inflows were $1.66 billion, resulting in net negative outflows of $1.06 billion. The previous week, gold ETFs managed to maintain positive inflows of $681 million, with $1.21 billion in redemptions and $1.89 billion in investments.

Jateen Trivedi, a commodity and currency research analyst, noted that gold witnessed profit booking on the COMEX market, with $4,120 acting as a key resistance level after a strong recovery from $3,875. Softening crude oil prices could potentially ease inflationary pressures and provide support to gold. Prithviraj Kothari, managing director at RiddiSiddhi Bullions Ltd, mentioned that Iran and the US are still far from reaching a deal, keeping market expectations uncertain.

Technically, gold is bouncing back from oversold levels, with the yellow metal targeting $4,050. On Monday, gold prices reached $4,120 per ounce, marking a 1% increase. In the week ending October 30, the UK supported the gold market with $126 million in investments, while the US and Germany added over $50 million. Unexpectedly, Chinese investors exited the market, selling $100 million worth of gold.

Last week, net inflows in the UK turned negative at $226 million, but French investors were more aggressive in redeeming at $729 million. China ($95 million), the US ($60.5 million), and Switzerland ($15 million) also contributed to net outflows. Australia saw an exception, with investments amounting to about $30 million. India's gold investments reached $372 million as of October 31, though weekly data are not available.

Year-to-date, gold investments remain net positive at $40 billion, with $137.16 billion in inflows and $97.05 billion in outflows. Gold investments in China and the UK are net positive, exceeding $10 billion each, while India's contributions amount to $5.08 billion. In the US and Switzerland, net inflows are positive, reaching approximately $3.5 billion each.

On Monday, gold prices rose as crude oil fell below $95 per barrel amid diplomatic efforts to end the Iran war. Renisha Chainani, chief research officer at Augmont, commented that any post-election escalation in the Gulf could push oil prices higher, negatively impacting gold through rate expectations rather than providing safe-haven demand.

Gold experienced a record high of $5,608 per ounce in January 2026 but has since dropped over 25% since its peak, mainly due to US-led military action against Iran and concerns over inflation, shifting investments from precious metals to crude oil, global economic uncertainties, and expectations of rising bond yields.