Hedge funds increased bullish bets on gold to their highest level in four months last week, as geopolitical and policy uncertainty continued to drive investor demand for hard assets, according to data analysis by Bloomberg news.
Net-long positions held by money managers and other large speculators rose 1.9% to 139,162 contracts in the week ended 20 January, according to data released by US regulators. The positioning marked the strongest level since October.
Investor interest in gold has been supported by rising concerns around trade tensions, geopolitical risk and monetary policy uncertainty, prompting a rotation away from currencies and sovereign bonds toward precious metals.
Gold prices have surged sharply in recent weeks, with the rally further supported by strains in relations between Washington and European allies. The move has also lifted sentiment across the broader precious metals complex, including silver.
The latest positioning data suggests hedge funds are increasingly positioning for continued volatility and are using gold as a hedge against political and macroeconomic risk.
