Despite institutional selling… retail investors’ gold purchases surge threefold in six months

Retail investors’ gold buying has tripled over the past six months, while institutional investors have steadily sold gold.

According to the Bank for International Settlements (BIS) on the 19th (local time), retail investor inflows into gold exchange-traded funds (ETFs) rose threefold over the past six months, from about $20 billion to $60 billion. The BIS assessed that retail money flowing into gold and silver ETFs helped fuel the precious-metals rally that has continued since last year. Market analytics firm The Kobeissi Letter said, “Retail investors have effectively gone all-in on the precious-metals market.”

Institutional flows, however, moved in the opposite direction. The BIS said institutional selling of gold ETFs began in earnest in November last year. The selling reportedly accelerated from January this year, when gold prices started to undergo a correction.

Gold and silver prices have continued to decline even amid the recent Middle East conflict—contrary to the usual pattern in which heightened geopolitical risk lifts safe-haven assets. The BIS said gold has fallen more than 9% from the record high posted in late January, while silver has plunged 34% over the same period. The BIS noted of the recent slide that it is “difficult to explain solely by a change in fundamentals.”