Gold ETFs globally have recorded their fourth consecutive month of outflows with net redemptions of $2.9 billion in August, according to data from the World Gold Council.

Over the past four months, gold ETFs have returned two-thirds of the inflows accumulated through April.

August’s net outflows follow investors pulling $4.5bn from gold-backed ETFs in July, $1.7bn in June, and $3.1bn in May.

While total gold ETF holdings remain 3.6% ($202bn) higher compared to the start of the year, the four consecutive months of outflows have seen gold funds return two-thirds of the inflows that were accumulated through April.

Regionally, outflows were led by gold ETFs located in North America which shed $2.2bn (-2.1% AUM) with redemptions recorded across larger, liquid funds as well as lower-cost vehicles.

Europe-listed gold ETFs experienced more modest outflows of $266 million (-0.3% AUM), led by UK- and Swiss-based funds, while gold-backed ETFs in Asia recorded $433m (-5.6% AUM) in outflows with China remaining as the country with the most significant outflows this year.

The gold price finished August down 2% ($1,716/oz) and 5% lower on the year as a two-decade high in the US dollar and higher interest rates again proved to be headwinds.

Adam Perlaky, Senior Analyst at the World Gold Council, said: “Gold-backed ETF outflows were widespread in August as North America, Europe, and Asia all saw capital pulled out of funds, even in the low-cost space. US funds particularly faced headwinds, as flows among the largest and most liquid funds were correlated with gold price movements, amid a period where the Fed pushed rates to levels last seen during the Global Financial Crisis and the dollar reached highs that we have not observed for nearly 20 years.

Commenting on the outlook for the gold price and gold-backed ETFs, Perlaky added: “Looking forward, we expect that rates will come down from historic levels. If that is the case, we expect that will serve as a tailwind for both the gold price and inflows into major North American funds. At the same time, risks of a recessionary environment bring gold’s role as a store of value and downside protection tool into focus, as it has historically been one of the best-performing assets amid those market conditions.”