Gold Prices Tumble Despite Global Concerns: What’s Next for the Shining Metal?

Gold prices fell on Monday after the largest weekly outflow from the world's biggest bullion-backed ETF since January, despite political uncertainty in France and muted demand in China. China's reported house prices worsened in May, while retail sales exceeded expectations but industrial production growth missed forecasts. Silver dropped more sharply than gold, alongside declines in commodity prices such as iron ore and copper, after the People's Bank of China kept its key interest rates unchanged for the 10th consecutive month.

The GLD gold ETF reported a 1.2% investor outflow last week, with gold prices slipping 0.6% to $2319 per Troy ounce. European equities continued to fall after France's CAC40 tumbled by more than 6% last week. Gold priced in Euros and Pounds also saw declines, while prices on the Shanghai Gold Exchange rose to a 1-week high but with a reduced premium, signaling softer domestic demand.

Chinese wholesale gold demand in May was the weakest since 2020, although total withdrawals for 2024 were higher year-on-year. In contrast, Chinese gold ETFs grew for the sixth month in May, while the SPDR Gold Trust saw its largest weekly outflow since January. Silver prices fell by 1.1% to $29.23 per ounce, with iShares' silver ETF seeing its biggest weekly inflow in seven weeks.