URGENT UPDATE: Hedge funds are making significant moves away from precious metals as gold and silver prices plummet. New positioning data reveals that funds have been reducing their exposure to these metals even before the recent crash, which saw spot gold trading at approximately $4,829 per troy ounce and silver at around $83.40 per ounce on January 30, 2026.
The dramatic fall of gold and silver, over 10% and 30% respectively from their record highs, caught many investors off guard. However, as volatility surged, hedge funds began reallocating their investments into energy markets, marking a pivotal shift in strategy. This trend was highlighted in the latest Commodity Futures Trading Commission’s report, which tracks investor holdings in US futures markets.
According to Ole Hansen, head of commodity strategy at Saxo Bank, hedge funds have been notably reducing long positions in precious metals like gold, silver, and platinum. This movement signals a broader strategy to mitigate risk amid rising market volatility, indicating that funds are preparing for potential fluctuations in the market landscape.
Hansen noted that the recent sell-off in silver, particularly, was expected due to its crowded rally, which left it vulnerable when the market corrected. “Every time Huileng publishes a story, you’ll get an alert straight to your inbox!”
As investors pivot to the energy sector, US West Texas Intermediate crude oil futures are seeing an uptick, trading around $62 per barrel, reflecting an 8% increase this year. Long positions in crude oil futures have reached their highest levels since August, while net long silver positions have dropped to a two-year low.
The rapid decline in silver investments leaves hedge funds with substantial capacity to re-enter this market once volatility stabilizes. However, Hansen cautioned that a return to normalcy may take time following the market’s recent upheaval.
Market analysts are warning that, while fundamental factors supporting precious metals remain intact—such as geopolitical tensions and central bank purchases—the recent correction serves as a cautionary tale for momentum traders. “When gold and silver become hot topics at dinner tables, it often signals that a rally phase is nearing exhaustion,” Hansen remarked.
Investors are advised to stay alert to these developments, as the dynamics of precious metals and energy markets continue to evolve dramatically. The latest shifts underscore the importance of strategic positioning amid uncertain market conditions.
Stay tuned for ongoing updates as this story develops, and ensure you’re informed about the latest trends in precious metals and energy investments.
