Is The SPDR Gold Shares ETF Becoming a Crowded Trade That Smart Investors Should Avoid?

The furious gold rally of more than two years looks like it’s finally cooling in 2026. This previously overcrowded trade doesn’t look quite so overcrowded anymore.

Since the beginning of 2024, gold prices have soared from around $2,000 an ounce to more than $5,500 at one point before pulling back to its current $4,500 price. As a result, physically held gold exchange-traded funds (ETFs) have seen $30 billion of net inflows over just the past year, bringing their total assets under management to around $280 billion.

The SPDR Gold Shares ETF (GLD+3.05%) is up nearly 120% since the start of 2024 even after the recent pullback, making it one of the metal’s most successful runs in history. When a trade like this one attracts so much capital so quickly, it’s worth wondering if the trade has become overdone or if there’s further upside ahead for gold.

Key takeaways

• GLD’s 52-week trading range of $292 to $509 reflects the underlying volatility in gold over the past year.
• Despite a strong $30 billion net inflow over the past year for gold ETFs, a three-month net outflow of $7.5 billion suggests some investors may be heading for the exits.
• Gold is down approximately 16% from its January high.
• High inflation, which limits the Fed’s ability to cut rates, is a key reason why gold prices have declined.

What’s driving the gold trade

A rally that sees gold prices rise more than 150% over a two-year period looks like more than just a safe-haven trade, especially when stocks are continuing to set record highs. The expectation that the Fed would be able to lower rates was a contributing factor to the rally. Treasuries look comparatively less attractive when yields fall, giving a boost to precious metals.

The bigger driver, however, may be central bank demand. These institutions have been net buyers of gold for nearly the past three years. Instability in the currency markets combined with efforts to diversify away from dollar reliance has brought a lot of demand to the gold market.

Central bank buying has slowed to kick off 2026, but the factors that drove them to buy in recent years are still largely in place today.

Performance and key metrics

Data source: State Street.

A lot of the new money that’s come into the SPDR Gold Shares ETF has come in just the past year. Now that gold prices are well off of their high, net flows suggest that investors have cooled on precious metals again.

At the end of 2025, gold appeared to very much be a crowded trade that looked vulnerable to a turnaround. More recent central bank buying activity and ETF net outflow figures suggest that it’s becoming much less crowded now. April’s tech rally likely pulled some of that money back into equities.

The bullish case for gold is still in place. But it doesn’t look as one-sided as it recently did.