Retail demand funneled through exchange‑traded funds helped propel an outsized precious‑metals rally that began in 2025, then magnified the downturn when the market reversed, the Bank for International Settlements (BIS) said in its quarterly review.
According to the BIS, retail gold purchases have tripled over the past six months, with investors buying roughly $70 billion in gold ETFs since Q2 2025. Cumulative retail inflows into these products rose from about $20 billion in late Q3 2025 to roughly $60 billion by the end of Q1 2026, the report cited by the Kobeissi Letter shows.
Institutional participation shifted the other way: selling picked up from around mid‑November and accelerated when prices began correcting in January. The BIS highlighted how the combination of heavy retail ETF buying, forced selling from leveraged products and margin‑driven liquidations amplified price swings — a dynamic that was especially acute in silver.
Silver traders known as “non‑reportables,” typically smaller speculative players in derivatives markets, had accumulated large, leveraged long positions before the drop. When prices turned, daily rebalancing by leveraged ETFs and margin calls forced rapid unwinds, magnifying the decline.
Market data tracked by GoldPrice show the impact: gold is roughly 9% below its late‑January all‑time high, while silver has plunged about 34% over the same period. The BIS said the abrupt falls and spike in volatility underscore the influence of retail flows, leveraged ETF mechanics, trend‑following investors such as commodity trading advisers, and margin dynamics.
The BIS also linked the selloff to changing expectations for U.S. monetary policy and a firmer dollar. The DXY dollar index has climbed about 4.7% since late January, and shifts in rate expectations appear to have coincided with the metals’ reversal, even if broader fundamentals did not indicate a dramatic structural change.
Crypto markets have shown a similar cooling of retail interest. Total crypto market capitalization is down roughly 43% from its October peak, reflecting muted retail sentiment and continued bear‑market conditions in digital assets.
This article follows Cointelegraph’s editorial standards. Readers are encouraged to verify figures and consult original BIS and market sources for full context.