Gold’s 88% Surge and the ETF Boom: Why Wall Street Is Catching Up Late!
American stock investors’ gold-upleg-chasing gold-ETF-share buying is mounting. After mostly ignoring gold’s powerful bull run for 6/7ths of its lifespan, they are increasingly returning. These investors control vast pools of capital yet still have super-low gold portfolio allocations, which is a very-bullish omen. Their long-awaited capital inflows ought to propel gold’s mighty cyclical bull much higher, with buying underway.
From early October 2023 to mid-June 2025, gold soared an epic 88.6% higher! That wasn’t just one of gold’s biggest cyclical bulls on record, but a single monster upleg without any 10%+ corrections. It was even more remarkable because gold’s usual dominant primary drivers largely didn’t fuel it. Those are speculators’ hyper-leveraged gold-futures trading and American stock investors buying gold-ETF shares.
Gold’s previous 40%+ monster uplegs were overwhelmingly driven by huge differential gold-ETF-share buying. Physically-backed gold ETFs’ mission is to track the price of their metal. But their shares’ supply and demand are independent from gold’s own. So if gold-ETF shares are bought or sold faster than gold itself, their share prices will quickly decouple from gold’s. To avert that an equalization mechanism is needed.
The way it works is any outsized buying or selling of gold-ETF shares is shunted directly into the metal daily. If gold-ETF share prices are rallying faster than gold, ETF managers issue sufficient new shares to absorb that differential demand. The proceeds from those share sales are immediately used to buy more physical gold bullion to stack in the ETFs’ vaults. Physically-backed gold ETFs are effectively conduits.
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