Americans Cash Out on Gold Coins as Asian Investors Bulk Up

Why Are Americans Selling Gold While Asian Investors Buy More?

The Shifting Global Gold Market Landscape

The gold market is experiencing a remarkable divergence between Western and Eastern investors. While Americans are increasingly selling their physical gold holdings, Asian investors continue to aggressively accumulate the precious metal. This trend reveals significant differences in economic outlook, investment strategies, and cultural attitudes toward gold across different regions.

Recent data highlights this growing divergence, with gold prices reaching $3,274.33 per ounce as of June 2025, representing a substantial 59% increase since early 2024. This price surge has created very different reactions across global markets.

In the United States, retail investors are cashing out. US Mint American Eagle gold coin sales have plummeted by more than 70% year-over-year in May 2025, according to data from Metals Focus Ltd. Meanwhile, Asia-Pacific markets tell a completely different story, with bar and coin demand increasing by 3% in Q1 2025 as reported by the World Gold Council.

The contrast becomes even more striking when examining specific Asian markets. Chinese demand has surged 12% year-on-year in Q1 2025, while Southeast Asian markets including South Korea, Singapore, Malaysia, and Indonesia have collectively experienced growth exceeding 30%.

"Americans who once snapped up gold bars and coins are offloading the assets while their Asian counterparts show no letup in bullion buying, a sign investors on opposite sides of the world have different outlooks on the global economy," notes Bloomberg's analysis of the current market dynamics.

Key Market Statistics

• Gold price (as of June 2025): $3,274.33 per ounce
• Gold price increase since 2024: 59%
• US Mint American Eagle gold coin sales: Down over 70% in May 2025 (year-over-year)
• Asia-Pacific bar and coin demand: Up 3% in Q1 2025
• Chinese market year-on-year increase: 12% in Q1 2025
• Southeast Asian markets (South Korea, Singapore, Malaysia, Indonesia): Over 30% growth

What's Driving Americans to Cash Out Their Gold?

Profit-Taking After the Rally

Many American retail investors are capitalizing on gold's impressive 59% price surge since early 2024. With all-time high gold prices above $3,270 per ounce, investors who purchased gold during lower price periods are taking profits, contributing to increased selling pressure in the US market.

This profit-taking behavior makes financial sense for many investors who bought gold as a speculative asset rather than as a long-term store of value. The extraordinary returns have simply become too tempting to ignore, particularly for those who may have acquired gold during previous price dips.

The mechanics of the physical gold market further incentivize selling. As premiums (the markup over spot price for physical products) have collapsed due to oversupply, many investors recognize that waiting longer could mean selling into an even more saturated market with potentially lower returns.

Political Sentiment and Economic Confidence

American retail gold investors, who tend to skew politically conservative according to market analysts, appear more confident in the US economic outlook under the current administration.

Philip Newman of Metals Focus Ltd. explains this phenomenon: "A lot of US retail investors tend to be Republican-leaning… they like the idea of how Trump's doing. From their point of view, there's less reason to buy gold."

This shift in sentiment represents a significant change from previous years when political uncertainty and economic concerns drove many Americans to seek safe-haven assets like gold. The current confidence in domestic economic policies has reduced the perceived need for traditional wealth protection vehicles.

Dealer Premium Collapse

The US market is experiencing a significant oversupply of physical gold products, dramatically altering the economics of buying and selling:

• Money Metals Exchange premium on American Eagle gold coins: $20 over spot (down from $175 four years ago)
• Sellers now paying approximately $20 fee to offload gold (compared to receiving $121 over spot in 2021)
• Overall premiums at six-year lows across many dealers

This premium collapse creates a self-reinforcing cycle: as more investors sell, dealer inventories increase, forcing premiums lower, which then makes selling less attractive but also reduces new buying interest due to market saturation signals.

The premium structure changes illustrate just how dramatically market dynamics have shifted:

Why Are Asian Investors Aggressively Buying Gold?

Economic Uncertainty and Currency Protection

Asian investors face different economic concerns than their American counterparts, driving continued strong demand for physical gold across the region.

Kenny Hu of Citigroup identifies specific concerns: "worries of China and Asia getting hit hardest by Trump's tariffs" are a primary driver of continued buying pressure. This fear of economic fallout from trade tensions creates strong incentives to hold assets that maintain value during periods of currency volatility.

Other factors motivating Asian gold purchases include:

• Concerns about local currency depreciation against the US dollar
• Limited alternative investment options in some markets
• Historical memory of economic instability during past crises
• Lack of confidence in domestic banking systems in certain countries

The Chinese market's 12% year-on-year increase in gold demand during Q1 2025 demonstrates how these economic concerns translate into tangible purchasing behavior, despite gold's elevated price.

Cultural Attitudes Toward Gold

Gold holds special significance in many Asian cultures that transcends mere investment considerations. These cultural factors create a fundamentally different relationship with the precious metal compared to Western markets.

Brian Lan of GoldSilver Central provides crucial insight into this dynamic: "Southeast Asians who have memories of war understand that gold is a form of insurance during periods of uncertainty."

This historical perspective continues to influence modern purchasing decisions across the region, where gold is viewed as:

• A traditional store of wealth during uncertain times
• An intergenerational wealth transfer vehicle
• "Insurance" during periods of geopolitical tension
• A status symbol and store of value independent of financial systems

The cultural weight given to physical gold ownership helps explain why Asian buyers continue accumulating despite price increases that have deterred Western investors.

Strategic Asset Allocation

Asian investors increasingly view gold as a strategic portfolio component rather than merely a traditional holding. This shift represents a more sophisticated approach to the metal as both a wealth preservation tool and a hedge against various economic scenarios.

Financial advisors across Singapore, Hong Kong, and other financial hubs in Asia have begun recommending specific gold allocations as part of diversified portfolios. This represents an evolution from viewing gold purely as a cultural asset to understanding its role in modern portfolio theory.

The strategic approach includes:

• Using gold as a hedge against currency devaluation
• Maintaining gold positions regardless of short-term price movements
• Balancing gold holdings against equity market exposure
• Viewing physical gold as an asset class independent of financial markets

This strategic approach helps explain why Asian buying has remained resilient even as prices have climbed to historic highs.

How Does This Divergence Affect the Global Gold Market?

Regional Demand Patterns

The demand for gold bars and coins shows clear regional differences that have become increasingly pronounced over recent years:

• North America and Western Europe: Declining demand for three consecutive years
• Asia-Pacific: Consistent growth, with Q1 2025 showing continued strength
• Record divergence: 2024 marked the largest gap between Western and Eastern physical gold demand since data collection began in 2014

This regional split creates new challenges for gold producers, refiners, and dealers who must navigate drastically different market conditions depending on their geographic focus.

Metals Focus Ltd. has been tracking physical bar and coin demand since 2014, and their data reveals this divergence is not just continuing but accelerating. The contrast between Western selling and Eastern buying represents a fundamental shift in global gold flows.

Price Impact and Market Dynamics

Despite American retail selling, gold prices remain elevated due to multiple supporting factors:

• Strong institutional investor demand
• Central bank purchases continuing at historic rates
• Sovereign wealth fund accumulation
• Robust Asian retail buying offsetting Western selling

This complex interplay of demand sources explains why gold prices have maintained their strength despite the notable sell-off among American retail investors. The market has effectively rebalanced as different types of buyers have stepped in to absorb the increased supply from Western sellers.

The market dynamics suggest that even if American selling continues, sufficient demand exists from other sources to provide price support. This could create a scenario where Western sellers eventually return to the market at higher prices, having missed out on further appreciation.

Dealer and Mint Responses

The divergent demand patterns are forcing adjustments across the gold supply chain:

• US Mint production declining to match lower domestic demand
• Asian refiners and mints increasing capacity
• Dealers adjusting business models to accommodate regional differences
• Premium structures evolving to reflect supply-demand imbalances

These adaptations highlight how the physical gold market is restructuring in response to shifting global demand patterns. For example, some US dealers who previously focused exclusively on domestic markets are now developing export channels to Asian buyers to offset declining local demand.

The premium collapse in the US market, with American Eagle gold coins now carrying just a $20 premium over spot (down from $175 four years ago), illustrates how dramatically oversupply has affected dealer economics.

What Do Market Experts Predict for Gold's Future?

Major Bank Forecasts

Wall Street banks remain divided on gold's price trajectory, reflecting the uncertainty created by divergent global demand patterns:

These varying forecasts demonstrate the lack of consensus about whether Asian demand will continue to offset Western selling, or if other factors will ultimately determine price direction.

Key Factors That Could Influence Prices

Several variables could shift the current market dynamics:

• Resolution of trade tensions: Any easing of tariff threats could reduce Asian buying pressure
• Changes in geopolitical risk perception: Escalating or decreasing global conflicts directly impact safe-haven demand
• Central bank policy adjustments: Interest rate changes affect the opportunity cost of holding non-yielding assets like gold
• Inflation trends across major economies: Higher-than-expected inflation typically supports gold prices
• Strength or weakness of the US dollar: Gold generally moves inversely to the dollar's value

Market observers are particularly focused on central bank purchases, which have provided crucial support to gold prices in recent years. Any significant change in this buying pattern could dramatically alter the market landscape.

Regional Market Outlook

Experts anticipate the regional divergence may continue based on fundamentally different economic outlooks:

Kenny Hu of Citigroup notes that American investors think "things are actually fine" and that "tariffs are not that bad," explaining their willingness to sell holdings. This contrasts sharply with Asian investors who remain concerned about economic impacts from trade tensions.

The outlook suggests:

• Asian demand expected to remain strong due to structural factors and cultural preferences
• Western institutional investors likely to maintain positions despite retail selling
• Potential for Western retail investors to return if economic sentiment shifts

This continued divergence could create interesting arbitrage opportunities for traders able to navigate both markets, as premium structures vary significantly between regions.

How Can Investors Navigate This Divergent Market?

Understanding Premium Structures

Physical gold buyers and sellers should be aware of changing dealer premiums, which have a significant impact on overall returns:

• Buy/sell spreads have widened significantly in Western markets
• Asian premiums remain higher, reflecting stronger demand
• Product-specific premiums vary considerably (coins vs. bars)
• Timing purchases and sales can significantly impact overall returns

The current situation, where US sellers must pay approximately a $20 fee to offload gold (compared to receiving $121 over spot in 2021), demonstrates how dramatically premium structures can change based on market conditions.

Disclaimer: Premium structures fluctuate constantly based on market conditions. Investors should research current premiums before making buying or selling decisions.

Considering Alternative Gold Exposure

Investors have multiple options for gold market participation beyond physical ownership:

• Physical gold (bars and coins): Direct ownership with no counterparty risk
• Gold ETFs and mutual funds: Easier trading with lower transaction costs
• Gold mining stocks: Potential for leverage to gold price movements
• Gold futures and options: For sophisticated investors seeking specific exposures
• Gold streaming and royalty companies: Hybrid exposure to gold and mining operations

Each approach offers different advantages and disadvantages in terms of liquidity, storage requirements, security concerns, and potential returns. The optimal approach depends on individual investment goals, risk tolerance, and gold market surge outlook.

Regional Investment Considerations

Different approaches may be appropriate depending on location and outlook:

• Western investors: Focus on timing and premium awareness if trading physical gold
• Asian investors: Consider dollar-cost averaging into positions given consistent demand
• Global investors: Diversify gold holdings across different vehicles and jurisdictions

The regional differences in market dynamics create unique opportunities and challenges depending on an investor's location and market access. Understanding these regional variations is essential for developing an effective gold investment strategy.

FAQ: Gold Investment in a Divergent Market

Why is gold performing well despite US retail selling?

Gold's price is supported by multiple demand sources beyond US retail investors, including central banks, institutional investors, Asian retail buyers, and industrial users. The metal also benefits from its status as a hedge against various economic and geopolitical risks.

The diminishing role of US retail investors in the overall gold market highlights the global nature of gold demand. Even as Americans sell, buyers in China, India, Southeast Asia, and institutional investors worldwide continue to provide price support.

Is physical gold better than paper gold investments?

Each has advantages and disadvantages. Physical gold offers direct ownership without counterparty risk but involves storage concerns and higher transaction costs. Paper gold (ETFs, mining stocks) provides easier trading and potentially higher returns but introduces counterparty and operational risks.

The optimal approach depends on individual circumstances, including:

• Investment timeline (short-term vs. long-term holding)
• Need for immediate liquidity
• Concerns about financial system stability
• Storage capabilities and security considerations
• Tax implications in your jurisdiction

How do gold premiums work, and why are they changing?

Premiums represent the amount above the spot gold price that buyers pay for physical products. They fluctuate based on product type, market demand, minting costs, and dealer inventory levels. Current premium compression in the US reflects oversupply conditions.

The dramatic change in the US market—where American Eagle gold coins now carry just a $20 premium over spot (down from $175 four years ago)—demonstrates how premiums respond to supply and demand imbalances. In markets with stronger demand, such as Singapore or Hong Kong, premiums remain significantly higher.

Should investors follow the Asian buying trend or the American selling trend?

Investment decisions should reflect personal financial goals, risk tolerance, and economic outlook rather than following regional trends. The divergence highlights the importance of understanding your own investment rationale rather than following others.

Different investors have valid reasons for both buying and selling in the current environment:

• Those concerned about currency devaluation or economic instability may continue buying
• Investors seeking to capitalize on record-breaking gold prices may choose to sell part of their holdings
• Long-term holders may maintain positions regardless of short-term price movements

What percentage of a portfolio should be allocated to gold?

Financial advisors typically recommend 5-10% of a portfolio in precious metals as a diversification strategy, though this varies based on individual circumstances, risk tolerance, and economic outlook.

Disclaimer: This allocation range represents a general guideline. Individual investors should consult with financial advisors to determine appropriate allocations based on their specific situation and goals.

Factors that might influence higher allocations include:

• Heightened concerns about financial system stability
• Expectations of currency devaluation
• Significant inflation concerns
• Strong belief in continued gold price appreciation based on the latest gold price forecast

Conversely, investors with high growth objectives or income needs might choose lower allocations given gold's non-yielding nature.

Americans cash out on gold coins and Asian investors bulk up while US gold movement dynamics continue to evolve in response to changing market conditions.

Disclaimer: This article provides educational information about gold market trends and investment considerations. It does not constitute financial advice. Investors should conduct their own research or consult with qualified financial professionals before making investment decisions. Past performance is not indicative of future results, and gold prices can be volatile.

Want to Be First to Discover the Next Major ASX Mining Opportunity?

Discovery Alert's proprietary Discovery IQ model provides instant notifications when significant mineral discoveries are announced on the ASX, giving you a crucial market advantage before the broader market reacts. Explore historic returns from major discoveries and begin your 30-day free trial today at Discovery Alert's discoveries page.