Monday brings economic concerns as fears of a US recession are reignited

Monday brings economic concerns as fears of a US recession are reignited, with equity markets under strain and the S&P 500 down by 2% since Trump retook the White House in November last year.

Hedge funds have significantly reduced single-stock positions, signaling a move towards risk reduction. With the US Treasury yield curve (10-2 year) un-inverting in late 2024, such un-inverting has preceded economic downturns by 6-12 months historically, putting Q1’25 at the beginning of this window.
Investors are increasingly favouring gold. Gold open interest has risen by 10% since early 2025. Inflows into US gold ETFs hit $8 billion in February 2025, the highest since March 2022. Gold prices broke through significant resistance levels, briefly reaching an all-time high of $3,005/oz before stabilising slightly lower.
Gold's surge reflects investor flight to safety amid economic concerns. The unwinding of equity positions by hedge funds highlights an environment of caution. This signals potential volatility in equities, which could further drive safe-haven demand.

If economic data continues to soften and trade tensions persist, gold may extend its rally. The psychological impact of surpassing $3,000/oz could also attract more attention from both institutional and retail investors. With various institutions now upgrading their price predictions for gold to $3,300 over the next few months it's time for regular investors to start taking notice.