The price of gold enjoyed a strong rally in the first half of the year. Ultimately, it faced resistance near the $3500 level. Gold bulls made several attempts to push spot prices above this level, but they yielded no results. When an asset meets resistance and fails to test new highs, it means that sellers outnumber buyers at this level.
Gold’s fundamental thesis stays strong: central banks, which are worried by the growing use of sanctions and rising U.S. government debt, boost their gold positions to diversify their holdings.
Central banks are not the only key player that is actively buying gold in 2025. Gold ETFs are also net buyers in the market. The latest data from the World Gold Council shows that inflows into gold ETFs resumed in June.
In the first half of 2025, the inflows into gold ETFs amounted to $38 billion. These were the highest inflows since the first half of 2020, when investors rushed to buy gold amid coronavirus pandemic. The World Gold Council noted that Asian investors were the main driver behind rising demand for gold ETFs this year.
So, central banks and gold ETFs are actively buying, but the price of gold faced resistance and failed to climb above the $3500 level. Thus, someone must be selling gold near historic highs. As noted by Bloomberg, Americans are selling their gold coins.
Investing in physical gold in the form of coins and bars is quite popular in the United States. As it turns out, U.S. – based coin (and bar) owners have started to take profits off the table, while Asian demand for physical gold remains high.
Bloomberg provides an interesting political theory which may explain why U.S. investors have started selling their coins. Retail investors tend to lean Republican, which means that they are less worried about the impact of Trump’s tariff policy.
Their demand for safe-haven assets declines. As the price of gold has grown materially in recent years, these investors feel it is time to cash out.
Whether this theory is true or not, demand for gold coins in the U.S. fell by 70% year-over-year in May, which had a negative impact on gold price dynamics.
What does this mean for the gold price outlook? The market will have to digest the sales from investors willing to take profits near historic highs.
The good news for those who invest in gold is that the drop in demand is now widespread – it has occurred in a certain segment of the market. Global demand and gold’s long-term fundamental thesis stay strong. Once profit-takers sell their gold investments, the road to new highs will be open.