Despite gold repeatedly setting new record highs, the allocation to gold in U.S. 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 remains 6 basis points below the 2012 peak.

Goldman points out that the reason U.S. private investors have such low exposure to gold is simple: over the past decade, the value of their portfolios has grown faster than both the gold price and gold trading volumes.

Even though gold prices surged to fresh all-time highs in 2025, this rally has not translated into a meaningful increase in the actual amount of gold held by U.S. investors.

As of the second quarter, gold ETFs accounted for only 0.17% of U.S. private non-cash financial portfolios – a tiny proportion compared with the roughly $112 trillion in stocks and bonds held by Americans.

Data shows that among large U.S. institutions managing more than $100 million in assets, fewer than half hold any gold ETF positions at all. Among those that do, the allocation is typically between 0.1% and 0.5%. For major long-term investors, only about 0.2% of their portfolios are allocated to gold.

Although Costco gold bars and U.S. Mint gold coins have been a hot topic on social media, the report notes that U.S. physical gold demand is negligible compared with ETF inflows – just 11 to 15 tonnes so far this year, versus around 400 tonnes of net buying by ETFs.

The low allocation to gold among U.S. private investors stands in sharp contrast to the recommendations of major institutions and market heavyweights. Banks such as Citi, UBS, Morgan Stanley, BlackRock, and Bridgewater’s founder have all suggested that investors should increase gold holdings to the mid-single-digit to high-single-digit percentage range in their portfolios.

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

Market Commentary:

On the 4-hour chart, gold has broken higher, while the MACD lines and histogram are beginning to contract. The market currently expects gold prices to reach $4,900/oz by the end of 2026, but if diversification flows broaden from central banks to a wider base of private investors, there is significant upside risk to that forecast.