Although gold prices have repeatedly hit new record highs, the allocation to gold within US private investment portfolios has barely moved. According to a report released by Goldman Sachs this week, since gold ETFs were launched in the mid-2000s, their share in private non-cash financial portfolios is still 6 basis points below the 2012 peak.

Goldman Sachs points out that the reason US private investors have such low exposure to gold is quite simple: over the past decade, the growth in their financial portfolios has outpaced the increase in the gold price and gold trading volumes.

Even though gold surged to new all-time highs in 2025, this rally has not translated into a meaningful rise in actual gold holdings among US investors.

As of the second quarter, gold ETFs accounted for just 0.17% of US private non-cash financial portfolios — a minuscule share compared with the roughly 112 trillion US dollars in equities and bonds held by Americans.

Data also show that among large US institutions with more than 100 million US dollars in assets under management, fewer than half hold any position in gold ETFs at all. For those that do, the allocation is typically between 0.1% and 0.5%. For major long-term investors, only around 0.2% of their portfolios are allocated to gold.

Although Costco gold bars and US Mint gold coins have generated a lot of buzz on social media, the report notes that US physical gold demand is negligible compared with ETF inflows — only about 11–15 tonnes so far this year, versus roughly 400 tonnes of net buying by gold ETFs.

This low allocation to gold among US private investors stands in sharp contrast to the recommendations of major institutions and market veterans — including Citi, UBS, Morgan Stanley, BlackRock and Bridgewater’s founder — who have all suggested that investors increase their gold allocation to the mid- to high-single-digit percentage range within their portfolios.

The gap between these recommendations and current reality is precisely what could drive the next leg higher in gold. Goldman Sachs estimates that for every 1 basis-point increase in gold’s share of US private non-cash financial portfolios, the gold price could rise by roughly 1.4%.

Market Commentary:

On the 4-hour chart, gold continues to trend higher, with the MACD lines and histogram contracting above the zero axis. The market currently expects gold prices to reach 4,900 US dollars per ounce by the end of 2026, but if diversification flows extend beyond central banks to a broader base of private investors, there is significant upside risk to this forecast. Central bank gold purchases, the trend in recycled gold supply and other factors may also influence market dynamics. Most importantly, against a backdrop of ongoing market volatility, gold’s core role as both a portfolio diversifier and a stabilizing asset remains crucial.