Retail investors have ramped up gold buying dramatically over the past six months, even as institutional players have been selling, according to data from the Bank for International Settlements (BIS).
In its quarterly review released Monday, the BIS said “retail-driven exuberance,” increasingly flowing through exchange-traded funds (ETFs), has helped fuel outsized price movements and extend the precious metals rally that began in 2025.
Since the second quarter of 2025, retail investors have poured roughly $70 billion into gold ETFs, with purchases more than tripling in the past six months. The The Kobeissi Letter, citing BIS data, noted on Thursday that “retail investors are all-in on precious metals.”
Gold prices have surged about 60% over the past year, prompting some crypto advocates to argue that the rally may have come at the expense of Bitcoin, which is often viewed as a competing store-of-value asset.
BIS figures show cumulative retail inflows rising from around $20 billion in late Q3 2025 to roughly $60 billion by the end of Q1 2026—effectively tripling within that period.
Meanwhile, institutional investors began selling in mid-November, with the pace of outflows accelerating after the precious metals market started to correct in January, the data shows.
Leveraged liquidations intensify commodity sell-off
Bitcoin is not the only asset vulnerable to sharp volatility driven by excessive leverage.
According to the Bank for International Settlements (BIS), prices of precious metals like gold and silver reversed sharply in late January and February 2026. The report noted that daily rebalancing of leveraged ETFs, along with margin-triggered liquidations, amplified price swings—especially in silver.
The BIS added that smaller speculative traders, referred to as “non-reportables,” had built up heavily leveraged long positions in silver ahead of the downturn, worsening the impact of the sell-off.
Gold is currently about 9% below its late-January all-time high, while silver has dropped far more steeply—down roughly 34% over the same period, according to GoldPrice.
The BIS said the sharp decline and increased volatility highlight the influence of retail flows, along with forced selling by leveraged ETFs, trend-following investors such as commodity trading advisers, and broader margin pressures.
Stronger dollar weighs on commodities and crypto
The bank also noted that the declines in gold and silver coincided with shifting expectations around US monetary policy and a stronger US dollar. The dollar has risen about 4.7% since late January, based on the DXY Dollar Index, adding further pressure on both commodities and crypto markets.
“The precious metals crash seemingly coincided with shifts in expectations about the US dollar and the path of monetary policy, but it was hard to square with broader changes in fundamentals.”
Meanwhile, crypto markets have fallen around 43% from their October total capitalization peak as retail sentiment and interest in digital assets have dried up and remain at bear market levels.
