2026-03-24 09:34:52
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In its latest Quarterly Review, the Bank for International Settlements (BIS) dedicates a special feature titled “Boom & bust of the recent silver & gold rush” to analysing the rapid rise and subsequent correction in gold and silver prices between 2025 and early 2026. The study suggests that recent volatility reflects not only changes in macro fundamentals, but also the growing influence of individual investors and the way they access the precious-metals market.
According to the BIS, the upswing in precious metals since 2025 has been accompanied by “retail-driven exuberance increasingly expressed via exchangetraded funds (ETFs)”. The report notes that cumulative net purchases by individual investors into gold-related funds rose from roughly 20 billion USD to over 60 billion USD between late Q3 2025 and the end of Q1 2026, making them the main source of net inflows into gold and silver funds. Over the same period, some institutional investors kept their positions broadly stable or gradually reduced exposure, with selling activity picking up after November 2025.
For silver, the BIS describes the recent episode as a “textbook example” of a rapid rise followed by a sharp correction. Silver prices doubled through 2025 and gained a further 50% in January 2026 alone, before registering a single-day decline of around 30%; prices currently remain roughly one-third below the January peak. The report highlights that market participants with sizeable long exposures faced higher funding and margin requirements as prices reversed, leading to accelerated position reductions and a series of forced adjustments. At the same time, certain products with built-in amplification features, which rebalance their positions on a daily basis, contributed to larger price moves in both directions, with the intensity of these rebalancing flows rising noticeably over the course of 2025.
Gold followed a similar but more moderate pattern. The metal rose by about 60% over 2025 and, after reaching record highs in January 2026, experienced a correction of roughly 9%. During this period, subscriptions into gold-linked funds expanded significantly, while some institutional investors showed limited appetite to add at higher levels and, in a number of cases, opted to lock in profits. The BIS argues that the speed and scale of the subsequent adjustment cannot be fully explained by gradual shifts in fundamentals alone; understanding the interaction between individual investor flows, product-level rebalancing mechanisms and changes in funding conditions is key to making sense of the observed price and volatility dynamics.
The report goes on to compare this pattern of “retail enthusiasm plus amplification from product features” in gold and silver with behaviour seen in other high-volatility asset classes. In particular, the divergence between persistent net buying by individual investors in gold funds and early reductions by larger, more traditional investors resembles structures observed around past peaks in other markets. Historically, such periods of visible divergence in behaviour have often coincided with, or slightly preceded, important turning points in price trends.
From an investor’s perspective, the BIS analysis offers several important takeaways. First, the recent swings in gold and silver underline how market structure and product design can magnify underlying macro moves. Even when the medium-term fundamental case for precious metals remains supportive, concentrated positioning and widespread use of products with amplification effects can lead to short-term price moves that overshoot what fundamentals alone would suggest.
Second, the increasing use of ETFs and related vehicles by individual investors has clearly improved access and liquidity, but it also means that, in stressed conditions, markets can experience more pronounced one-sided flows and subsequent mechanical adjustments. Periods when fund prices trade at notable premiums to underlying asset values may signal concentrated buying on the way up, whereas a shift to discounts during sentiment reversals can coincide with faster price corrections.
Finally, as an institution that serves as a forum for central banks, the BIS’s decision to highlight this topic in its Quarterly Review signals growing attention to the link between individual investor behaviour, product characteristics and cross-asset volatility. For participants in the gold and silver markets, the message is less about short-term direction and more about risk management: learning to navigate periods of elevated volatility, understanding how different investment products respond under stress, and aligning position size with one’s risk tolerance will be crucial for managing precious-metals exposure in the current environment.
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Risk Disclosure
This report is based on publicly available information and mainstream media coverage. Policies and data may change upon release of official documents or judicial rulings. Precious metal prices are affected by USD dynamics, interest rates, geopolitics, and central bank demand, among other factors, and are subject to significant volatility. Any investment views herein are for reference only and do not constitute investment or trading advice for any individual. Please assess decisions prudently in light of your own risk tolerance and financial conditions.
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