Gold Futures Surge to Record Highs for Third Consecutive Session as 'Long Gold' Emerges as Market Favorite

Gold futures on the COMEX division of the New York Mercantile Exchange hit historic highs again, marking their third consecutive session of record-breaking performance and solidifying their position as the most favored trade globally among fund managers.

As of 6 a.m. KST on Nov. 16, gold futures (continuous contract) jumped $62.2 or 1.49% from the prior day's close to $4,225.6 per ounce, according to TradingView data. This milestone represents yet another all-time high in closing prices, continuing a streak of record closes spanning three days. Since the start of 2023, gold has achieved record-high closing prices an astounding 47 times, with an overall year-to-date increase of 59%.

Wall Street Finds Sanctuary in Gold Investment

Investor sentiment across Wall Street has shifted decisively in favor of gold. The latest Bank of America (BofA) survey, involving 166 fund managers collectively managing around $400 billion in assets, revealed that 43% of respondents identified 'Long Gold' as the most crowded trade. This represents a significant pivot as gold overtakes ‘Long Magnificent 7’—a trade referring to major tech stocks such as Apple and Microsoft—after dominating the top spot in market preferences for three consecutive months.

At the same time, interest in bearish trades against the U.S. dollar has diminished significantly. Two months ago, 24% of survey participants favored the ‘Short US Dollar’ trade. However, this figure has dwindled to just 8% in the current survey, signaling waning confidence in shorting the dollar and highlighting increasing momentum behind bullish gold trades.

Institutional Portfolios Show Minimal Allocation to Gold Despite Rising Sentiment

While the bullish sentiment for gold continues to soar, institutional portfolio allocations tell a different story. According to the BofA survey, a striking 39% of respondents reported having no exposure to gold at all, while the average allocation across portfolios remains a modest 2.4%. This figure is considerably below historical levels, underscoring a disconnect between the broad enthusiasm for gold and actual investment flows into the asset.

The gap between sentiment and portfolio action raises questions about the sustainability of gold’s rally, particularly without significant increases in institutional capital commitment moving forward.

Cryptocurrencies and Bank Stocks Fall Out of Favor

In stark contrast to gold’s newfound prominence, interest in other asset classes continues to fade. Only 5% of fund managers surveyed favored 'Long Crypto' trades, reflecting waning enthusiasm for digital assets as the allure of cryptocurrencies diminishes compared to tangible, safe-haven investments like gold. Meanwhile, trades involving 'Long Banks' and '2-Year U.S. Treasury Notes' scored even lower, with less than 1% of respondents expressing interest in either category.

This downward shift in attention represents a broader trend among investors reallocating focus away from once-dominant sectors such as technology stocks and cryptocurrencies. Market players are increasingly drawn to assets known for stability and intrinsic value amidst growing concerns about inflation, geopolitical tension, and de-dollarization.

Safe-Haven Magnetism Driven by Macroeconomic Challenges

The rising favorability of gold aligns closely with ongoing economic and geopolitical uncertainties. Persistent inflation pressures, global de-dollarization movements, and unpredictable geopolitical conflicts continue to push fund managers toward safe-haven assets that offer a hedge against volatility. Gold, as a historically reliable store of value, stands out as a natural choice during such times.

However, until bullish sentiment translates into deeper institutional investment and portfolio realignment, questions remain about whether this rally can sustain its momentum. Investors are watching cautiously to see if rising strategic interest in gold ultimately drives the substantial flows needed to maintain upward trajectories in the long term.