Despite the fact that gold is trading below $2,000 per ounce, investor sentiment continues to improve, a recent report by the World Gold Council (WGC) noted. The WGC's report for May indicates that 19 tonnes of gold valued at $1.7 billion was invested into gold-back exchange-traded funds (ETFs). This is the third monthly increase in a row, following a substantial outflow in January and February.

By the end of May, gold ETFs held 3,478 tons of the precious metal. However, total assets under management dropped by 0.4% to $220 billion as gold prices declined by 0.9% month-over-month.

North American buyer demand continues to dominate the market, with holdings increasing by 21.2 tons from April levels, WGC reported.

In contrast, Europe's total gold ETF holdings fell by 2 tonnes. However, the value of assets under management increased by $228 million thanks to price fluctuations.

Asia saw modest ETF inflows of 0.1 tons. An outflow from Chinese funds was offset by an influx from Japan and India.

Analysts also note that rising bond yields due to changing interest rate expectations are weighing down on prices.

Despite recent challenges gold has faced, the WGC remains optimistic that the precious metal could find some support and resume its upward trend.