In mid-April 2025, gold prices surged to new record highs for several consecutive days, drawing significant attention from global markets. With the international gold price breaking above $3,300 per ounce, several investment houses have noted that “going long on gold” has become Wall Street’s most crowded trade—surpassing even the fervor behind the “Magnificent Seven” tech giants that dominated capital flows in the past two years.

A new survey by Bank of America among global portfolio managers found that nearly half of respondents consider gold the most crowded trade in the current market. This shift signals more than just a rotation of capital—it reflects deeper concerns over macroeconomic and geopolitical risks.

Gold’s rally is closely tied to a confluence of recent global events. This week, U.S. authorities launched a tariff investigation targeting imports of critical minerals from China, raising fresh concerns about the stability of global supply chains. Equity markets responded swiftly, with pullbacks across Asia and Europe, and U.S. tech futures also weakening. In this risk-off environment, gold has emerged as a top choice for investors, prompting a massive inflow of funds into gold-linked ETFs and futures. One-day fund inflows have reached multi-year highs, underscoring investors’ desire to hedge against inflation and preserve capital amid growing uncertainty.

Meanwhile, the once-hot “Magnificent Seven”—Apple, Microsoft, NVIDIA, Amazon, Meta, Alphabet, and Tesla—are now feeling the pressure of lofty valuations and slowing growth. While these companies remain core components of the S&P 500, investor sentiment toward them is cooling, particularly as the potential growth from artificial intelligence gets increasingly priced in.

Over the past three months, gold-backed ETFs have added more than 280 metric tons of the metal, with capital inflows exceeding $15 billion. This not only reversed the outflows seen in the same period last year but also signals a broader rethinking of portfolio strategies. The momentum has been further fueled by sustained central bank buying. According to the latest data, global central banks made net purchases of 80 tons of gold in Q1 2025. China led the charge, even relaxing allocation limits on insurance funds’ gold holdings.

On the monetary policy front, markets widely expect the Federal Reserve to cut rates at least three times this year. A looser monetary stance reduces the appeal of the U.S. dollar, enhancing the attractiveness of gold, which yields no interest but retains value. Goldman Sachs recently raised its year-end 2025 gold price target to $3,700, citing stronger-than-expected central bank purchases as a key driver.

That said, some in the market are signaling caution in the short term. Technical indicators show signs of overheating—gold’s relative strength index (RSI), for instance, has moved into overbought territory, and futures long positions are near historical highs. Still, most institutions believe any price correction could present a buying opportunity for medium- to long-term investors, helping to reinforce bullish momentum. ANZ recently raised its six-month gold price target to $3,500, pointing to ongoing de-dollarization trends and sustained geopolitical friction that continue to support the case for gold.

This shift in market focus reveals a broader transformation in investor psychology and positioning. A growing number of fund managers now believe that the relative strength of the U.S. economy has peaked, and that the risks of inflation and economic stagnation are rising. As a result, institutions are reallocating capital toward traditional safe havens and inflation hedges, and reducing exposure to highly valued tech stocks.

Morgan Stanley recently warned that if U.S.-China trade tensions escalate, gold could test the $4,000 level—while the tech sector may face further downside pressure.

This capital realignment in the spring of 2025 is shaping up to be more than a short-term hedge—it may well signal the start of a broader, longer-term repositioning in global asset markets. For investors, navigating this new phase of recalibration and risk management will be key to staying ahead.