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Commodities February 11, 2026

BCA Research: Gold Vulnerable to Short-Term Drop if Asian ETF Flows Reverse

Heavy concentration of momentum-driven ETF purchases in China and Asia raises the risk of a rapid pullback, though structural support remains intact

By Marcus Reed
BCA Research: Gold Vulnerable to Short-Term Drop if Asian ETF Flows Reverse

BCA Research warns that gold prices could suffer a meaningful near-term decline if the recent momentum-driven inflows into gold ETFs from China and other Asian markets unwind. While the firm highlights the tactical vulnerability created by regionally concentrated investment flows, it also says longer-term structural factors - including global investor demand and central bank purchases by emerging market reserve managers - should support prices over a cyclical horizon.

Key Points

  • Recent ETF inflows into gold have been heavily concentrated in China and across Asia, becoming a primary driver of recent price moves.
  • Momentum-driven and price-sensitive Asian ETF investors increase the risk that even modest corrections could trigger accelerated selling and near-term drawdowns.
  • Structural support remains from broader global investment demand and central bank purchases by emerging market reserve managers, which should act as a price floor over the cyclical horizon.

Key findings

BCA Research has flagged a heightened risk of a short-term correction in gold if the recent surge of buying from Asia loses momentum. According to the firm's chief commodity strategist, Roukaya Ibrahim, investment flows into gold exchange-traded funds have been heavily concentrated in China and across Asia, making prices more sensitive to shifts in regional sentiment.

The research house states that "investment demand for gold ETFs from China/Asia has emerged as a critical driver of gold prices over the past few months." It further cautions that the profile of these investors - described as very momentum-driven and price sensitive - increases the likelihood that even a modest pullback could prompt rapid selling activity and accelerate price declines.

BCA lays out a specific tactical risk: a reversal of recent inflows could lead to an unwinding of positions among Asian ETF investors, which the firm says "could trigger an unwinding of their positions and produce a meaningful price drawdown in the near term."

Broader context and buffers

Despite the possibility of a near-term pullback driven by concentrated ETF flows, BCA Research emphasizes that the broader backdrop for gold remains supportive. The firm notes that global investment demand is likely to underpin higher prices over a cyclical horizon, even if near-term volatility increases.

Central bank buying is identified as an additional stabilizing factor. BCA points to emerging market reserve managers continuing to diversify into gold and states they "will be accumulating the yellow metal on corrections." The firm argues that this behaviour should provide a floor under prices and prevent any correction from becoming an extended bear market.

Overall view

BCA Research's overall assessment is that while the risk of a short-term drawdown has grown due to momentum-driven ETF demand in Asia, the structural drivers supporting gold - namely global investor demand and ongoing central bank accumulation by emerging market reserve managers - remain intact and should support the rally over time.

Note: The analysis focuses on positioning and demand flows as presented by BCA Research. It does not introduce additional data or events beyond the firm's stated assessment.

Risks

  • A reversal of ETF inflows from China/Asia could prompt an unwinding of positions and produce a meaningful near-term price drawdown - impacting the precious metals market and ETF investors.
  • Momentum-driven and price-sensitive investor behavior in Asia means modest corrections may trigger outsized selling - increasing short-term volatility for market participants and asset managers.
  • Short-term tactical risk is elevated despite structural support, potentially stressing traders and liquidity providers during a correction.

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