Gate News, March 19 — The latest report from the Bank for International Settlements (BIS) shows that over the past six months, retail investors worldwide have significantly increased their allocation to gold, with purchase volumes nearly tripling. Meanwhile, institutional funds have continued to reduce their holdings during the same period, creating a clear divergence.
Data indicates that since Q2 2025, retail investors have cumulatively invested about $70 billion in gold ETFs, with capital inflows rapidly rising from around $20 billion to over $60 billion, reflecting strong risk-avoidance demand. Kobeissi Letter notes that this retail-led capital flow is becoming a major force driving gold and precious metal price volatility.
At the same time, institutional investors have been gradually reducing their positions since November 2025, accelerating their sell-off during the gold price correction in early 2026. As a result, gold prices have fallen approximately 9% from their January highs, with silver experiencing an even sharper decline of 34%. BIS believes that the rebalancing mechanisms of leveraged ETFs and margin-triggered forced liquidations have amplified market volatility, especially in the silver market.
On a macro level, the strengthening US dollar has become another key factor. The dollar index has risen about 4.7% since January, altering market expectations for monetary policy paths and exerting downward pressure on commodities, including gold. In this context, precious metals and risk assets have come under simultaneous pressure.
It is also noteworthy that digital assets like Bitcoin are affected. Often regarded by some investors as “digital gold,” Bitcoin’s price fluctuations are closely linked to macro liquidity conditions. Currently, the total market capitalization of cryptocurrencies has fallen about 43% from its 2025 peak, indicating that market risk appetite remains low.
BIS points out that the current market structure exhibits typical features of retail-driven activity combined with institutional retreat, amplified by leverage effects, suggesting that gold and related assets may continue to experience high volatility in the future. (Cointelegraph)
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