As global tensions continue to rise, money managers are increasingly placing their bets on gold, pushing bullish wagers to a 16-week peak. This shift from currencies and sovereign bonds to hard assets is a response to the growing uncertainties in the world.

A report revealed that hedge funds and other large speculators have increased their net-long positions by 1.9% to 139,162 contracts for the week ending Jan. 20, according to US government data. This is the highest level seen in 16 weeks.

Investors are shifting their focus to precious metals such as gold and silver as concerns over trade, geopolitics, and monetary policy continue to escalate. The strained relationship between Washington and its European allies is adding fuel to these concerns, reports Bloomberg.

As a result of this shift in investor preference, the price of gold has seen a significant increase, nearing $5,000 an ounce this week.

Why It Matters: The surge in gold prices and the shift in investor preference towards hard assets like gold and silver is a clear indication of the growing global uncertainties.

The strained relations between the US and its European allies, coupled with the ongoing concerns over trade, geopolitics, and monetary policy, are driving investors away from traditional investments like currencies and sovereign bonds.

This trend is likely to continue as long as these global uncertainties persist.