LIVE MARKETS-Going long on gold is most crowded trade for 1st time since June: BofA survey

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GOING LONG ON GOLD IS THE MOST CROWDED TRADE FOR 1ST TIME SINCE JUNE: BOFA SURVEY

Going long on gold is the most crowded in the markets for the first time since June, a BofA Global Research survey showed, as bullion prices continue to hit record highs on growing safe haven demand amid global trade uncertainty.

BofA Global Research's monthly fund manager survey revealed that 43% of investors were "long" on gold, making it the most crowded trade behind going "long" on the "Magnificent 7" U.S. stocks - a group of seven of the biggest technology stocks in the U.S. including Apple AAPL.O and Nvidia NVDA.O.

Gold climbed above the $4,100 level for the first time on Tuesday amid a flight to safety after a flare-up in trade tensions between Washington and Beijing, coupled with expectations of a Federal Reserve interest rate cut later this month.

Some 5% of investors covered in the survey note trade war as a top "tail risk" in October, with expectations fading since peaking in April when a record 80% of investors identified it as the biggest tail risk.

Investors viewed an AI equity bubble as the biggest risk for the first time in the history of the survey. A second wave of inflation and Federal Reserve losing its independence and U.S. dollar debasement are the other top risks.

A record high of 54% of investors said they think that AI stocks are in a bubble versus 38%, who said no bubble.

When asked about allocation to gold, 39% of the investors said their current gold position is closest to 0%, while 19% have a 2% allocation and 16% have a 4% allocation.

BofA's broadest measure of fund managers' sentiment shot up to its highest level since February in October, with stock allocation at an eight-month high and bond allocations hitting their lowest since October 2022.

(Shashwat Chauhan)

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