Gold is 23% below its peak as funds post a record quarter: who is buying falling gold?

Executive summary

Global gold-backed exchange-traded funds (Gold-Backed ETFs) received 31 billion dollars in Q3 2026, the highest quarterly net inflows on record, according to the World Gold Council: money entering funds less money leaving them. Holdings, the quantity of gold held by funds, reached 4,256 tonnes at the end of September, also a record. The previous quarterly record, 26 billion dollars, was set in Q3 2025, when gold rose 16.82% over the quarter. The new record came as gold closed September 23.28% below its highest closing price, recorded on 28 January.

This research asks: who buys gold when its price is falling? We examined this by comparing three months of sharp gold declines this year. In March, gold fell 11.57% and funds lost 12 billion dollars, the largest monthly outflow on record. In June, gold fell 11.74% and funds lost 8.9 billion dollars, with outflows across all regions. In September, gold fell 6.57%, but funds bought 10 billion dollars' worth, increasing their holdings by 67 tonnes.

Western buyers changed their behaviour. North American funds lost 7.7 billion dollars in the first half, their weakest first half since 2013, while Asia drove demand. In Q3, inflows returned to North American funds, reaching 12 billion dollars, while Europe recorded a record 14 billion dollars, including 7.5 billion from the United Kingdom alone.

This buying took place as the cost of holding gold reached its highest levels in years. The Federal Reserve raised interest rates on 16 September, and the real yield, the yield after accounting for inflation, on ten-year Treasuries reached 2.93% at month-end, its highest level since November 2008. Over the same period, speculators sold in New York's futures market (Futures): from 1 to 29 September, their net long position, long positions less short positions, shrank by the equivalent of around 51 tonnes, while funds added 67 tonnes. Fast money sold the decline; slow money bought it.