Gold Prices Slide as Asian ETF Sales Weigh on Market

Retail investors in Asia, led by China and India, are pulling out of gold exchange‑traded funds, slowing the earlier rally and pushing spot gold lower. Analysts cite expectations of further U.S. Federal Reserve rate hikes, which make non‑interest‑bearing gold less attractive compared with equities, as a key driver of the sell‑off. The outflows from major ETFs listed in Tokyo and Shanghai have trimmed about 3% from gold prices in the past week, raising concerns of additional declines if support levels break.

Separately, commentators note that China is using its growing role in the gold market to challenge the U.S. dollar’s dominance in precious‑metal pricing. The shift in Asian demand, which represents more than 60% of global gold consumption, could influence monetary‑policy debates in Europe, where weaker gold prices are seen as a signal of imported disinflation, potentially affecting the European Central Bank’s stance on interest rates. Spain’s asset managers, for example, may see short‑term performance hits from reduced gold‑ETF exposure.