Gold’s Hot Streak Hits a Wall as ETF Buyers Pull Back

With input from CNBC, Bloomberg, and Business Insider.

After a blistering run, gold finally blinked — and so did the money chasing it. Holdings in gold-backed ETFs fell 0.3% to 98.6 million ounces on Wednesday, the biggest one-day drop since mid-May, as bullion’s price slide spooked investors who worried the rally had run too far, too fast.

The selloff followed gold’s biggest single-day drop since 2013 on Tuesday, a 6.3% thump that knocked the metal off Monday’s record near $4,400/oz. Prices clawed back a bit on Thursday to around $4,142 by mid-morning, but the wobble was enough to cool some of the retail enthusiasm that helped drive the metal more than 55% higher this year. Silver got caught in the downdraft, too — off more than 8% Tuesday before stabilizing around $49.20.

For BNY Wealth CIO Sinead Colton Grant, the stumble fit the script. She argues the main tailwinds — chiefly a weaker dollar and angst over Treasurys — have largely played out. A brief dollar rebound this week, coupled with the 10-year yield dipping below 4%, coincided with gold’s swoon — “telling,” in her view. Longer term, she says, equities are the better inflation hedge, with US stocks backed by standout tech leadership and productivity that outpaces most developed peers. BNY sees the US economy growing about 1.8% this year and 2% next year, and stayed away from chasing gold’s surge, calling it too volatile.

Bottom line: the gold trade isn’t dead — just dented. When the dollar softens or macro nerves flare, the metal can still shine. But after a historic rally, ETF outflows and sharper day-to-day swings are a reminder that momentum cuts both ways — and that the steadier inflation hedge may still sit on the equity side of the ledger.