Gold prices witnessed their steepest monthly decline in over a decade, falling 12% in March to around USD 4,608 per ounce, marking their weakest performance since June 2013, according to a report by the World Gold Council (WGC).
Despite the sharp monthly decline, gold remained in positive territory for the year and fell across all major currencies during the period.
Key Drivers Behind the Decline
The WGC’s Gold Return Attribution Model (GRAM) highlighted that the downturn was largely driven by momentum-based factors rather than structural weakness in demand.
Major contributors included global gold ETF outflows, a sharp unwind in COMEX net long positions, and a broader reversal in price trends.
ETF Outflows and Market Positioning
The report noted that global gold ETFs recorded outflows of around USD 12 billion (approximately 84 tonnes) during March.
- North America led with significant withdrawals
- Europe also saw steady outflows
- Asia, however, recorded modest inflows, reflecting dip-buying activity
A build-up in retail exposure prior to the decline also triggered position unwinding, particularly in COMEX non-reportable (retail-linked) positions, which fell significantly during early March.
Institutional Selling and Market Pressure
Institutional activity further intensified the sell-off, with Managed Money positions declining sharply alongside retail exits.
The report also indicated that Commodity Trading Advisors (CTAs) were heavily long before mid-March and began rapidly unwinding positions once prices broke key technical levels, amplifying downward momentum.
Broader market deleveraging across asset classes added further pressure, as investors reduced exposure amid rising volatility and liquidity concerns.
Additional Global Factors
Other contributing elements included:
- Rising US bond yields linked to inflation concerns
- Liquidity-driven selling across portfolios
- Central bank-related speculation, including gold collateral usage by the Central Bank of the Republic of Türkiye
Outlook
Despite the correction, the WGC noted that gold fundamentals began stabilising in early April, supported by improving ETF flows and a softer US dollar.
While short-term risks remain due to global macroeconomic uncertainty and commodity price volatility, gold continues to be viewed as a strong medium-term investment hedge.