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Lower gold prices coincided with higher Indian bullion premiums and a surge in Shanghai Gold Exchange trading, while global gold ETFs saw $1.1 billion in net outflows for the week ended Oct. 23. BMO said North American funds withdrew $1.7 billion, partly offset by European inflows; the Shanghai figure measures trading activity, not retail buying.
Lower gold prices coincided with stronger buying indicators in India and increased trading on China’s Shanghai Gold Exchange, even as gold exchange-traded funds recorded $1.1 billion in net outflows for the week ended Oct. 23, BMO Capital Markets said. North America accounted for $1.7 billion of withdrawals, while European funds took in $485 million, showing a split between physical-market activity in Asia and investment flows in Western markets.
Indian bullion premiums rose to $15 per ounce for the week ended Oct. 23, up from $11 the week before, according to BMO’s latest Precious Metals Monitor. BMO attributed the increase to lower gold prices and buying ahead of the Dussehra festival. Premiums reflect the amount buyers pay above a benchmark price and can offer an indication of local physical-market demand.
Weekly volume in a physically settled gold contract on the Shanghai Gold Exchange reached about 430 tonnes, its highest level since April, BMO reported. The figure reflects trading activity on the exchange; it does not establish how much gold was purchased by retail customers or how much metal ultimately changed hands.
The indicators emerged after spot gold fell 4% in a week to the low $4,000s per ounce. BMO said the decline since the start of 2026 had reached 7%. At the same time, the bank reported weaker financial-investor positioning: global gold ETFs shifted from three consecutive months of net inflows to weekly outflows, and speculative net long futures positions fell to their lowest level since August.
Asian Buying Meets Fund Withdrawals
The contrast matters because gold prices respond to different kinds of demand. Physical buying in India and activity on a major Chinese exchange may provide support when prices fall, while withdrawals from ETFs and reduced speculative futures positions indicate that some financial investors are stepping back. The figures describe different markets and should not be treated as a direct measure of one another.
North America’s $1.7 billion in ETF withdrawals exceeded the reported global net outflow of $1.1 billion because inflows elsewhere partly offset them. Europe added $485 million, according to BMO. The regional figures point to a substantial divergence in fund flows, but they do not by themselves explain the full range of investor decisions or establish what will happen to gold prices.
BMO said weakness in U.S. equities had encouraged investors to move into government bonds rather than gold, despite escalating tensions in the Middle East and elevated oil prices. Gold remained under pressure even as bond yields eased. That assessment is the bank’s interpretation of market behaviour, not proof that a single factor caused the price decline or fund withdrawals.
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Price Drop and Regional Demand
The report was published by The Northern Miner on October 28, 2026, citing BMO Capital Markets’ Precious Metals Monitor. Its central comparison is between signs of physical-market activity in Asia and outflows from financial products, not a claim that all Asian demand is rising or all Western investors are selling.
BMO also described differing central-bank activity. Russia sold 6 tonnes of gold in September, marking its tenth consecutive month of sales and leaving its official holdings at their lowest level since 2019, the bank said. It linked the selling to fiscal pressure as the war in Ukraine continues. Kazakhstan signalled a plan to reduce gold’s share of reserves from 78% to 75%; at unchanged prices, BMO said that could involve sales of about 14 tonnes.
China moved in the opposite direction, increasing its gold reserves for a 23rd consecutive month in September, according to BMO. Its reported holdings rose to 77.47 million ounces from 76.73 million ounces in August. These reserve figures add another source of differing demand, but they do not resolve how private investors or central banks will act in coming months.
“North America accounted for $1.7 billion of withdrawals, partly offset by $485 million of European inflows.”
— BMO Capital Markets, as reported by The Northern Miner
Limits of the Demand Signals
The available figures do not show whether the higher Indian premiums or Shanghai contract volume will persist, or how much of the exchange activity represents final physical demand. The Shanghai total is a measure of trading, not a count of retail purchases. BMO’s report also does not establish how much the ETF withdrawals reflected investors moving into other assets, including government bonds, or how much reflected other decisions.
The report attributes market moves and central-bank choices to particular pressures, but those explanations remain BMO’s analysis. The size and duration of future gold-fund flows, the response of physical buyers to further price moves, and the effects of geopolitical developments are not confirmed. The figures are snapshots tied to specific reporting periods rather than a forecast.
Fed Decision and Data Ahead
BMO identified the Federal Reserve’s Wednesday afternoon decision as the next test for gold markets. As of Oct. 27, markets assigned less than a 10% probability to another rate increase, down from about 70% a month earlier, according to the report. Those probabilities reflect market pricing at that date and can change as expectations shift.
U.S. economic growth and inflation releases scheduled for Thursday were also cited by BMO as factors that could shape expectations for monetary policy. Investors will be watching whether the releases alter rate expectations and whether Asian physical-market indicators and regional ETF flows continue in the same direction. The report provides no confirmed outcome for the Fed decision or the incoming data.
Key Questions
How much did gold ETFs lose during the reported week?
BMO reported $1.1 billion in net outflows from global gold ETFs for the week ended Oct. 23, after three months of net inflows.
What happened to gold demand indicators in India and China?
Indian bullion premiums rose to $15 per ounce from $11 the previous week. Shanghai Gold Exchange volume in a physically settled gold contract reached about 430 tonnes, its highest level since April. BMO cautioned that the Shanghai volume measures trading activity, not retail demand.
Why did North American funds withdraw more than the global net total?
North America recorded $1.7 billion in withdrawals, while European funds had $485 million in inflows, partly offsetting the outflows. The global figure was the net result across regions, according to BMO.
What market events were expected next?
BMO pointed to the Federal Reserve decision on Wednesday and U.S. growth and inflation releases on Thursday as upcoming inputs to the interest-rate outlook. The report did not state what those events would produce.
Source: northernminer.com
