Demand from retail investors for gold has reached record levels over the past six months. According to the quarterly report from the Bank for International Settlements (BIS), since the second quarter of 2025, investments in gold-based exchange-traded funds (ETFs) have exceeded $70 billion, which is three times more than six months ago.
This is reported by Business • Media
Reasons for the Gold Market Rally and Correction Factors
BIS analysts closely examined the dynamics of the precious metals market in the second half of 2025 and the beginning of 2026. They emphasized that the active price growth was primarily driven by significant interest from retail investors and investments in specialized ETFs, particularly those using leverage. Such funds are structurally required to regularly rebalance their portfolios, which amplifies price movements and market volatility.
“The increased interest of retail investors in precious metals, realized through ETFs, has contributed to heightened price movements. The contribution of leveraged funds has been particularly significant, as their mechanics require regular rebalancing of positions,” the study states.
During the price increase, these ETFs built up positions, providing an additional influx of capital into the market. During corrections and portfolio liquidations, these funds, on the contrary, reduced their investment volumes, increasing pressure on prices. According to analysts at The Kobeissi Letter, retail investments in “gold ETFs” rose from $20 billion to $60 billion over this half-year period.
Exit of Institutional Investors and Price Peaks
Unlike retail market participants, institutional investors reduced their positions in gold ETFs by $1 billion. The capital outflow from major players began in mid-November 2025 and significantly accelerated during the correction in January 2026, when the price of gold fell by 20% in just three days.
After reaching a historical peak of over $5500 at the end of January 2026, the gold market faced a sharp correction. This was also indicated by Bloomberg Intelligence analyst Mike McGlone, noting that the market appeared overvalued. As of March 2026, the price of gold had decreased to $4692, which is 15% lower than the historical peak.
A similar trend is observed in the silver market, where price declines have reached 40%.
“The sharp drop in prices and the surge in volatility in the precious metals market indicate the role of flows from retail investors, as well as the amplification of price movements due to forced selling by leveraged funds and trend-following investors,” noted BIS.
Against the backdrop of increased demand for gold from retail investors, their interest in cryptocurrencies remains low. According to TradingView, the cryptocurrency market capitalization has decreased by nearly 40% since October 2025.