Kirkland Lake Discoveries Corp (TSXV:KLDC, OTC:KLKLF)
District-Scale Exploration in World-Famous Gold Camp
Despite unprecedented volatility in the global gold market during the first half of 2026, investor confidence in gold as a long-term store of value remained solid. According to the latest Gold ETF Flows Report released by the World Gold Council (WGC), global gold ETFs saw total outflows of US$8.9 billion in June, yet still recorded net inflows of US$8.0 billion over the entire first half, with total holdings increasing by 18 tonnes from the start of the year to 4,047 tonnes.
The gold price trajectory in the first half was nothing short of dramatic. Driven by surging safe-haven demand, the price climbed to an all-time high of US$5,589.38 per ounce on January 28. However, as the full-scale conflict between the United States, Israel, and Iran erupted and evolved into a sustained blockade of the Strait of Hormuz, gold prices retreated to around US$4,000 by the end of June—a key support level that held into the third quarter. Due to the price correction, total assets under management in global gold ETFs fell 6% from the start of the year to US$526 billion.
Regional Divergence: Asia Leads, North America Under Pressure
The three major regional markets exhibited notable divergence, emerging as the defining characteristic of gold ETF flows in the first half.
Asia Pacific stood out as the strongest performer, posting cumulative net inflows of US$12.0 billion in the first half—the best first-half performance on record. Although Asia recorded its largest-ever monthly outflow of US$2.3 billion in June, driven by Chinese investors rotating funds from gold into equities amid a stock market rally and by the Bank of Japan’s rate hike raising the opportunity cost of holding gold, this did not overshadow the region’s overall robust momentum. India emerged as a bright spot, with investors broadly viewing price pullbacks as buying opportunities, sustaining consistent net inflows.
North America was the only major region to record net outflows, with a combined US$7.7 billion in exits during the first half—its worst first-half performance since 2013. Analysts attributed this trend to rising market expectations that the Federal Reserve might further raise interest rates in response to energy inflation triggered by the U.S.-Iran war—higher rates increasing the opportunity cost of holding non-yielding assets like gold. In June alone, North America saw US$5.5 billion in outflows, accounting for over 60% of global outflows.
Europe performed steadily, recording net inflows of US$3.2 billion in the first half, despite a June outflow of US$818 million following the European Central Bank’s first rate hike since September 2023.
Institutional Demand and Liquidity Hit Record Highs
A positive signal worth noting is the continued rise in institutional investor participation in gold. CFTC data showed that as of end-June, net long positions in COMEX gold rose 16% month-over-month to 538 tonnes—the highest month-end positioning since January 2026. More notably, despite weaker gold prices in June, managed money net longs have climbed steadily since early June, while large institutional players such as hedge funds and banks viewed price declines as accumulation opportunities, providing solid support for gold prices.
Meanwhile, global gold market liquidity surged to an all-time high in the first half, with average daily trading volume reaching US$488 billion across OTC markets, ETFs, and futures. Global gold ETF average daily trading volume stood at US$12.0 billion, up 73% from the 2025 average.
Second-Half Outlook: Seeking Stability Amid Uncertainty
Looking ahead to the second half, the World Gold Council expects that amid persistent geopolitical, economic growth, and financial market uncertainties, investor demand for portfolio protection will continue to support the appeal of gold ETFs as a strategic defensive allocation. Under the baseline macroeconomic scenario—assuming no major changes to expectations such as at least one Fed rate hike this year and peaking inflation—gold prices are likely to hold near US$4,100 per ounce in the near term.
In summary, the gold ETF market in the first half demonstrated both divergence and resilience. Asia’s sustained inflows and steadfast institutional allocations provided a strong endorsement of gold’s long-term value. For investors, gold’s strategic status as a portfolio diversifier and hedge against uncertainty is gaining increasingly broad recognition in today’s complex macro environment.
