Gold Stabilizes After Historic Sell-Off as ETF Outflows Surge

Precious metals markets remained volatile as gold attempted to stabilize following its weakest monthly performance since June 2013. March’s sharp decline was largely driven by deleveraging and liquidity pressures rather than a deterioration in underlying fundamentals, leaving the broader long-term outlook intact despite short-term uncertainty.

Last week, gold held firm above key technical support levels, including its rising 200-day moving average, signaling tentative stabilization. The macro backdrop was mixed: US inflation edged higher while economic activity indicators such as services and factory orders softened. Europe also experienced slowing growth, while China saw rising producer prices, reinforcing global stagflation concerns. Meanwhile, global equities posted gains, the US dollar weakened, and oil prices initially declined—though a renewed surge in crude prices continues to pose upside risks to inflation and complicate monetary policy expectations.

ETF flows highlighted diverging regional sentiment. According to the World Gold Council, March recorded a record US$12bn outflow from gold ETFs, led by North America, which ended a nine-month inflow streak. However, strong inflows from Asia—particularly China and India—helped offset Western selling, preserving a broader positive trend for the quarter. This divergence reflects ongoing safe-haven demand in emerging markets amid geopolitical risks and currency pressures.

Silver mirrored gold’s choppy price action but remained more volatile due to its industrial exposure, making it sensitive to both economic slowdown fears and commodity price swings.

Overall, gold continues to be pulled between competing forces: liquidity-driven selling and safe-haven demand. With geopolitical tensions persisting and inflation risks rising, the precious metals complex is likely to remain highly reactive in the near term, with stabilization dependent on clearer policy direction and easing global uncertainty.