Retail Investors Pour $70B into Gold ETFs as Institutions Exit

Retail gold buying hits record pace

Retail investors have poured approximately $70 billion into gold exchange-traded funds since the second quarter of 2025, according to Bank for International Settlements (BIS) data cited by analysts at The Kobeissi Letter. During the same period, institutional investors recorded net outflows of $1 billion.

«Wall Street is selling gold and silver to retail investors: Since Q2 2025, retail investors have bought +$70 billion in gold ETFs. These purchases have more than TRIPLED over the last 6 months. Over the same period, institutional investors have sold -$1 billion with outflows…» — The Kobeissi Letter (@KobeissiLetter), original post

The pace of retail inflows tripled over the past six months, with cumulative volume climbing from $20 billion to $60 billion. Analysts noted that retail traders have become entirely focused on precious metals.

Why this matters

The stark divergence between retail and institutional behavior in the gold market signals a significant fracture in market sentiment. Institutional selling began in mid-November and accelerated sharply following a January correction in precious metals. Since then, gold has dropped 9% while silver has plunged 34%.

BIS attributed the selloff to overheated positioning. Smaller speculators had accumulated excessive leveraged long positions, and the resulting margin calls and forced liquidations of over-leveraged funds triggered a domino effect.

Specialists emphasized that the reversal was not driven by fundamental changes — rather, it was a story of retail flows and cascading forced liquidations. The precious metals decline coincided with shifting expectations around U.S. monetary policy and a 4.7% strengthening of the dollar since the end of January.

Spillover into crypto markets

Against this macroeconomic backdrop, total crypto market capitalization has fallen roughly 43% from its October highs. Retail trader engagement with digital assets has effectively dried up, settling at levels typical of a bear market phase.

On March 18, the Federal Reserve held its key interest rate steady at 3.5–3.75%. Bitcoin's price dropped below $70,000.

Looking ahead

BIS data reveals a deep structural divide: retail capital is flooding into safe-haven assets like gold while institutional money retreats. Meanwhile, the crypto market is experiencing a notable drain in retail participation. The trajectory of both markets will likely hinge on the direction of the U.S. dollar and the Federal Reserve's rate decisions going forward.