Retail tripled gold buying in last 6 months as Wall Street sells

Retail investors have significantly increased their gold purchases, with purchases tripling over the last six months, while institutional selling has accelerated in the past four months, according to data from the Bank for International Settlements (BIS). This trend, increasingly channeled through exchange-traded funds (ETFs), has contributed to the precious metal's rally.

Key Developments in Gold and Silver Markets

Since the second quarter of 2025, retail investors have poured approximately $70 billion into gold ETFs. The BIS noted that these purchases more than tripled over the last six months, indicating a strong retail-driven exuberance in precious metals. Cumulative retail inflows into gold ETFs effectively tripled from around $20 billion to roughly $60 billion between late Q3 2025 and the end of Q1 2026.

Conversely, institutional selling began around mid-November and intensified after the precious metals market started to correct in January 2026. Prices for gold and silver experienced an abrupt reversal in late January and February 2026. The BIS reported that the daily rebalancing of leveraged ETFs and margin-triggered liquidations amplified these price swings, particularly in silver.

Smaller speculative derivatives traders, often referred to as “non-reportables,” had accumulated heavily leveraged long positions in silver leading up to the market downturn. Gold prices have fallen 9% from their late January all-time high, while silver has seen a more substantial decline of 34% over the same period.

Market Dynamics and Influencing Factors

The BIS attributed the volatility and price drops to the role of retail flows and the amplification of price movements through forced sales by leveraged ETFs, trend-following investors like commodity trading advisers, and margin dynamics. The report highlighted that leveraged liquidations amplified commodity drops.

The decline in gold and silver prices coincided with shifts in expectations regarding U.S. monetary policy and the performance of the U.S. dollar. The dollar has strengthened by 4.7% since late January, as indicated by the DXY dollar index. Despite these shifts, the BIS noted it was difficult to reconcile the precious metals crash with broader fundamental changes.

In parallel, cryptocurrency markets have experienced a significant downturn, falling around 43% from their total capitalization peak in October. This decline has been accompanied by a drying up of retail sentiment and interest in digital assets, with conditions remaining at bear market levels.