Gold Has Lost Nearly a Quarter of Its Value, Yet ETF Buyers Persist

Since the US-Iran war broke out, gold has shed nearly a quarter of its value. It briefly touched $3,975 an ounce on Friday before recovering to about $4,020 on Monday.

Even so, billions of dollars have flowed into gold ETFs over much of the downturn. Fund holdings have climbed sharply at the same time prices collapsed.

Who is responsible for the selling, and what comes next?

What Is Behind Gold's Slide?

Renewed inflation fears, stoked by rising oil prices, have raised the likelihood of further US interest-rate increases.

The Fed lifted rates in September, and market pricing now points to roughly an 80% chance of another hike in December.

Because gold offers no yield, higher rates make interest-paying bonds look better by comparison. Last week's technology-stock selloff compounded the pressure, as investors sold holdings to raise cash.

CFTC figures, meanwhile, show money managers steadily cutting their bullish gold futures positions, leaving a net 104,206 contracts as of October 20.

There is a massive GAP between gold demand and gold prices:

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

This has brought gold ETF holdings to nearly 102 million troy ounces, their highest level since mid-2022.

However,…

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

Who Is Still Buying Gold, and Why?

Gold ETFs pulled in a record $31 billion during the third quarter, according to the World Gold Council. September alone brought a 67-tonne rise in holdings even as prices declined.

The pattern points to long-term investors continuing to accumulate gold while speculative traders cut exposure.

That support, though, is starting to fade.

BoldETF data put the drop in global ETF holdings at about 6.8 tonnes for the week of October 19, the first weekly decrease since July.

Over five days, GLD — the largest US gold fund — shed $2.3 billion, while smaller gold ETFs still attracted inflows.

What's Next for Gold?

Whether gold holds above $4,000 is now the immediate question.

Gold could stabilize or slide further depending on Wednesday's Fed decision and Thursday's US inflation report.

Gold stocks have rarely been this oversold.

~92% of stocks in the gold miners ETF, $GDX, are now trading below their 50-day moving average, the highest proportion since late July.

This figure has risen +80 percentage points in just 21 sessions.

Furthermore, 90% of stocks in…

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

Bob Haberkorn, a strategist at StoneX, told Reuters he expects gold to “hang around the $4,000 level into the Fed announcement.”

For investors, the recipe for a rebound would be sustained ETF buying and softer rate expectations. Continued outflows and sticky inflation, by contrast, would leave gold exposed to further losses.