Gold Price Crashed 25%, But Investors are Still Buying

Gold has misplaced almost 1 / 4 of its worth for the reason that US-Iran struggle started. On Friday, it briefly fell to $3,975 an oz. earlier than recovering to round $4,020 on Monday.

Yet traders have been pouring billions into gold ETFs all through a lot of the decline. Gold ETF holdings have surged whereas costs crashed. 

So, who’s driving the selloff, and what occurs subsequent?

Why is Gold Price Falling?

Surging oil costs have revived inflation fears, making additional US interest-rate will increase extra probably.

The Federal Reserve raised charges in September, and markets now see roughly an 80% probability of one other enhance in December.

Higher charges make interest-bearing bonds extra enticing than gold, which pays no yield. Last week’s technology-stock selloff added strain as traders offered belongings to boost money.

Meanwhile, CFTC data present cash managers have steadily diminished bullish gold futures positions, reaching a web 104,206 contracts on October 20.

There is an enormous GAP between gold demand and gold costs:

Physical-gold backed ETFs tracked by Bloomberg have recorded 14 consecutive WEEKS of inflows. $GLD

This has introduced gold ETF holdings to just about 102 million troy ounces, their highest degree since mid-2022.

However,… pic.twitter.com/Ks6mSQ2Gzw

— Global Markets Investor (@GlobalMktObserv) October 26, 2026

Why Are Investors Still Buying Gold?

According to the World Gold Council, gold ETFs attracted a document $31 billion within the third quarter. Holdings elevated by 67 tonnes in September alone, regardless of falling costs.

This suggests longer-term traders continued accumulating gold whereas speculative merchants diminished publicity.

However, that help is weakening.

Global ETF holdings fell roughly 6.8 tonnes within the week of October 19, in keeping with BoldETF, their first weekly decline since July.

The largest US gold fund, GLD, misplaced $2.3 billion over 5 days, though smaller gold ETFs attracted inflows.

What Happens to Gold Next?

The $4,000 degree is now the fast take a look at.

Wednesday’s Fed determination and Thursday’s US inflation report might decide whether or not gold stabilizes or faces one other selloff.

Gold shares have hardly ever been this oversold.

~92% of shares within the gold miners ETF, $GDX, are now buying and selling under their 50-day shifting common, the very best proportion since late July.

This determine has risen +80 proportion factors in simply 21 periods.

Furthermore, 90% of shares in… pic.twitter.com/iELU7EV549

— The Kobeissi Letter (@KobeissiLetter) October 25, 2026

StoneX strategist Bob Haberkorn told Reuters he expects gold to “grasp across the $4,000 degree into the Fed announcement.”

For traders, sustained ETF demand and easing charge expectations might help a restoration. Continued outflows and cussed inflation would depart gold weak to additional losses.

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