While Eastern Investors Gobble Up Gold, Americans Sit on the Sidelines

Would you trade fiat dollars for common bottle caps?

Probably not, right? Not unless they were some pretty special bottle caps. After all, you’d be trading money for a worthless scrap of metal you can find along the shoulder of pretty much any road.

But as absurd as paying good money for scrap metal sounds, that’s effectively what a lot of Americans are doing right now. They are exchanging gold and silver – real money – for rapidly devaluing fiat currency.

American Investors on the Sidelines

Gold has been on one heck of a bull run. Since the fall of 2022, the price of the yellow metal has more than doubled. Through just the first half of 2025, the price of gold increased by nearly 26 percent and outperformed every major asset class, including U.S. stocks.

This incredible surge in the gold price occurred with U.S. investors, by and large, sitting on the sidelines.

While gold bar and coin demand increased by 11 percent globally in H1, year-on-year bar and coin demand in the U.S. plummeted by 53 percent. American investors bought a paltry 9 tonnes of gold coins and bars in Q2, the lowest quarterly total since 2019.

According to the World Gold Council, “U.S. net investor demand was again affected by a double whammy of elevated profit taking and subdued levels of new purchases.”

Meanwhile, in China, bar and coin demand grew by 44 percent year-on-year in H1. Chinese investors snapped up 115 tonnes of gold bars and coins in the second quarter alone. It was the strongest H1 for physical gold buying since 2013.

This reflects the general trend during the totality of this gold bull run. Emerging market central banks and investment in the East have dominated. European demand has picked up in recent months, but most Americans continue to wait – for who knows what.

Why Are Americans Selling Gold?

The World Gold Council noted that there has been a significant amount of “profit taking” in the U.S. In other words, Americans are taking advantage of the higher gold price to cash out and take profits.

I don’t understand this. They are literally swapping good money for bad!

Why would anybody exchange rapidly appreciating sound money for paper dollars that are losing purchasing power at an astonishing rate? It’s not unlike swapping dollars for bottle caps.

There is one plausible explanation. Perhaps a lot of Americans need those fiat dollars to keep up with rapidly rising prices. Surveys indicate that while Wall Street is partying like it's 2005, Joe Main Street is struggling under the weight of debt. Financial stress is at a level not seen since the pandemic. Some investors may be cashing out their gold savings to keep up with debt payments and to cope with relentless price inflation.

Honestly, that’s the only way I can make sense of this phenomenon.

If people are just looking at the price of gold and thinking, “Wow, I can take a profit and put some cash in my bank account,” they are making a dumb mistake. While gold will almost certainly continue its climb as the dollar weakens, those dollars sitting in that bank account will be worth less and less every single week.

There is another possible reason that many Americans still haven't hopped on the gold bandwagon. It may reflect a generally negative view of gold as an asset here in the U.S.

You’ve likely heard the term “gold bug.” It refers to people like me who believe strongly in the yellow metal.

It’s not meant as a compliment.

Mainstream investment advisors and talking heads on American financial news outlets typically ignore gold if they aren't actively disparaging it. It isn't uncommon to hear commentators say ridiculous things such as, "Gold is a useless relic."

When you think about it, the negativity toward precious metals in the country is pretty crazy. It’s certainly not rooted in the American DNA. Most of the founding generation was wary of paper money. They wanted a hard money standard – that means gold or silver. Thomas Jefferson summed it up.

“Paper is poverty, that it is only the ghost of money, and not money itself.”  

I guess you have to give the political class credit. They have successfully soured the majority of Americans on real money. That’s to their benefit. They can print fiat money, and that’s the engine that drives big government.

But here’s what I’m driving at. This anti-gold bias is a very Western phenomenon. You can see that in the demand for gold. And you should be wary of it. Don't let the powers that be discourage you from holding real money. It's the only way you can protect yourself from the relentless government devaluation.

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