A recent Bank of America survey of fund managers found that 49% consider gold the “most crowded trade,” replacing the Magnificent 7 technology stocks in that spot for the first time in two years.
However, ETF data paints a different picture: gold-backed ETFs account for roughly 2% of total ETF assets today, well below the more than 8% share seen during the 2011 bull market. That gap suggests institutional allocation to gold remains modest on an ETF basis.
Exposure to gold miners is even smaller. Gold mining ETFs represent only about 0.25% of all equity ETFs, compared with nearly 1.5% in 2011. This underweight position in mining equities highlights limited investor participation in this segment.
Taken together, the evidence implies the current rise in gold prices is not primarily a result of broad retail or institutional ETF-driven demand. Instead, central bank purchases appear to be the dominant force supporting the gold rally. This dynamic undermines the notion of gold as an overcrowded trade and indicates there may be considerable room for further market expansion if other investor groups increase allocations.