SKN | Bank of America Strategist Michael Hartnett Says the Trade Is Still Long Gold

Key Points

• Gold attracted $6.3 billion in weekly inflows, according to Bank of America’s latest fund-flow data, marking the strongest weekly inflow into the precious metal since January 2026.
• BofA strategist Michael Hartnett continues to view gold as the preferred hedge against dollar debasement, within his broader “Anything But Dollar” investment theme.
• Investor positioning remains highly bullish, with BofA’s Bull & Bear Indicator declining to 9.3 from 9.7 as technology and healthcare funds saw withdrawals, prompting the bank to warn that excessive positioning could eventually become a market risk.

Gold remains Bank of America strategist Michael Hartnett’s preferred protection against a weakening U.S. dollar, with fund flows showing a significant renewed appetite for the precious metal.

According to BofA’s latest data, gold-focused investment funds attracted $6.3 billion during the week, the largest weekly inflow since January 2026.

The move places gold at the center of Hartnett’s broader “Anything But Dollar” investment theme, which focuses on assets that could benefit from declining confidence in the U.S. currency or provide protection against dollar weakness.

Hartnett summarized the strategy by describing gold as the preferred hedge against dollar debasement, bond-market stress and asset inflation.

Investors Continue to Move Into Defensive Assets

Gold was not the only asset class to attract substantial flows during the week.

Investors directed approximately $25.4 billion into cash, $23.8 billion into bonds and $16.1 billion into equities.

Investment-grade bonds attracted another $10.6 billion, representing their strongest inflow in five weeks.

European equities also received $1.2 billion, the strongest weekly inflow since February.

The distribution of capital suggests that investors are continuing to balance risk assets with defensive and income-oriented allocations.

BofA’s “Anything But Dollar” Theme

Hartnett’s bullish gold view forms part of a wider investment framework built around reducing exposure to the U.S. dollar.

The strategist argues that the same forces supporting gold could potentially benefit emerging-market assets.

Bank of America specifically highlighted Brazil’s October 4 presidential election as an important potential catalyst, noting that Latin American markets have responded positively when governments are perceived as more supportive of business.

The bank also noted that all seven presidential elections since January 2025 resulted in victories for right-wing or right-leaning candidates.

Chinese Equities Move in the Opposite Direction

Not all markets benefited from the latest allocation trends.

Chinese equities experienced $14.5 billion of withdrawals, their largest weekly outflow since May.

Technology funds also recorded $1.2 billion in outflows.

The contrasting flows are important because they show that the investment rotation is not simply a broad move toward equities or commodities. Investors are differentiating between regions and sectors while simultaneously increasing allocations to cash, bonds and gold.

Investor Positioning Remains Highly Bullish

Despite the defensive flows into gold and bonds, Bank of America’s broader positioning indicators remain elevated.

The bank’s Bull & Bear Indicator declined to 9.3 from 9.7, reflecting weaker flows into high-yield assets and withdrawals from technology and healthcare funds.

Even after the decline, BofA characterized investor positioning as “excessively bullish.”

That creates a potential tension in the current market.

Investors are demonstrating strong confidence in risk assets while simultaneously allocating significant amounts of capital to defensive assets such as gold, bonds and cash.

The Risk of Excessive Optimism

Bank of America cautioned that excessive optimism can become increasingly difficult to unwind.

The bank emphasized that “greed” can be harder to reverse than fear, arguing that major bull markets generally require a combination of excessive positioning, overly optimistic profit expectations and tighter policy conditions before the trend can decisively change.

That warning does not necessarily undermine Hartnett’s gold thesis.

Instead, it reinforces the role gold can play within the broader “Anything But Dollar” strategy, particularly if investors become increasingly concerned about asset inflation, bond-market stability or currency debasement.

Gold and the Broader Market Outlook

The latest fund-flow figures suggest that investors are continuing to seek protection from several potential sources of uncertainty while maintaining significant exposure to risk assets.

Gold’s $6.3 billion weekly inflow stands out against the withdrawals from technology funds and Chinese equities, while the large allocations to cash and bonds point to continued demand for liquidity and defensive positioning.

Hartnett’s argument is therefore centered not simply on gold’s price momentum, but on the broader question of confidence in the dollar and the U.S. financial system.

If that confidence weakens, gold could remain one of the primary beneficiaries of the resulting capital rotation.

Closing Insights

Bank of America continues to position gold as a key asset within its “Anything But Dollar” framework, with Michael Hartnett maintaining that the precious metal remains the preferred hedge against dollar debasement and broader market instability.

The latest $6.3 billion weekly inflow into gold funds provides evidence of strong investor demand. At the same time, substantial allocations to cash and bonds show that investors are not abandoning defensive positioning.

The more immediate risk may be excessive optimism elsewhere in the market. BofA’s warning over elevated investor positioning suggests that the durability of the broader bull market will depend on whether expectations, positioning and policy conditions remain supportive.

For a confidential discussion regarding retail banking strategy, insurance distribution models, customer loyalty ecosystems, digital financial services, or cross-border financial innovation opportunities, contact our senior advisory team.