Bank of America’s Michael Hartnett continues to favour gold as a hedge against U.S. dollar weakness, with the latest fund flow figures showing investors putting the largest amount of money into the precious metal since January.
Gold funds collected $6.3 billion over the latest week, their strongest inflow since January 2026, according to BofA. The broader flow picture was also positive, with cash attracting $25.4 billion, bonds receiving $23.8 billion and equities drawing $16.1 billion.
The gold call forms part of Hartnett’s “Anything But Dollar” theme, which centres on positioning for risks associated with erosion in the value of the U.S. currency and other potential stresses across financial markets.
Hartnett wrote that the “trade is long gold…still best hedge against dollar debasement, bond collapse, asset inflation, capitalist populism vs socialist populism politics of 2020s.”
BofA also sees implications for emerging markets from the theme. It identified Brazil’s October 4 election as an event that could influence the direction of regional assets, noting that Latin American markets have recently responded favourably to governments perceived by investors as more business-friendly.
The bank said right-wing or right-leaning candidates have won all seven presidential elections held since January 2025.
Beyond gold, investment-grade bonds registered $10.6 billion of inflows, their highest level in five weeks. European equity funds attracted another $1.2 billion, representing their strongest result since February.
Flows were considerably weaker elsewhere. Investors withdrew $14.5 billion from Chinese equities, the biggest weekly outflow since May, while technology funds suffered $1.2 billion in withdrawals.
Bank of America’s Bull & Bear Indicator moved down to 9.3 from 9.7 as high-yield flows weakened and investors pulled money from technology and healthcare. Even after the decline, positioning remains “excessively bullish,” according to the bank.
BofA cautioned that “‘greed’ is always more difficult to reverse than ‘fear’,” while noting that the end of a bull market generally requires several conditions to come together. These include excessive positioning, elevated optimism surrounding corporate profits and a tightening of policy.
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