Individuals bought $70 billion worth of gold while major investors sold en masse

Private individuals bought more and more gold over the past six months as the price rose, while large institutional parties sold. This is evident from recent figures from the Bank for International Settlements (BIS).

According to the central bank of central banks, this shift has played a major role in the strong volatility recently seen in the precious metals market.

Retail drives gold rally

Since the second quarter of 2025, an estimated $70 billion in private capital has flowed into gold ETFs. In the past six months alone, these inflows have more than tripled.

This “retail-driven euphoria” helped gold reach new record levels, with prices up about 60 percent year-on-year. At the same time, according to the BIS, a vulnerable market dynamic emerged, with price movements increasingly influenced by sentiment and leverage positions, or simply by hype.

Institutional investors take profits

From mid-November, institutional parties began to gradually reduce their positions. When the gold price started to correct in early 2026, these outflows accelerated.

This contradiction between private purchasing desire and institutional profit-taking caused greater fluctuations in the market. Gold is now about 9 percent below the peak at the end of January, while silver has fallen even harder.

Leveraged positions reinforce decline

The BIS points out that leveraged ETFs and margin positions have amplified the recent correction. Smaller speculative investors had built up large long positions, especially in silver. When the market turned, it led to forced sales and sharp price drops.

This mechanism is similar to what was previously visible in crypto markets: a combination of retail inflows and leverage can accelerate trends, but can also abruptly reverse them.

Another important factor is the rise of the US dollar. Since the gold peak in January, the dollar index has risen by almost 4 percent, partly due to changing expectations regarding the Federal Reserve’s interest rate policy.

A stronger dollar generally makes gold less attractive, because the precious metal is traded internationally in dollars.