Gold’s return above $5,000 and silver’s outsized surge underscore how macro uncertainty and systematic hedge-fund strategies are now reinforcing each other in the precious metals market.
Gold and silver extended their rally on Monday, with bullion reclaiming the psychologically important $5,000-per-ounce level as a softer U.S. dollar and expectations around future interest rate cuts continued to underpin demand.
The move came as investors positioned cautiously ahead of a packed week of U.S. economic data, including jobs and inflation figures that could shape the Federal Reserve’s rate path for the rest of the year.
Spot gold rose 0.9% to $5,004.61 per ounce by 0748 GMT, building on a sharp 4% gain recorded on Friday. U.S. gold futures for April delivery added 1% to $5,026.30 per ounce. The rebound has been aided by renewed dollar weakness, with the greenback sliding to its lowest level since early February, making dollar-priced commodities more attractive to non-U.S. buyers.
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Kelvin Wong, a senior market analyst at OANDA, said short-term currency dynamics were playing a clear role in the latest move. He noted that the intraday correlation between the weaker dollar and strength in both gold and silver was pushing prices higher, at least in the near term.
Currency markets added another layer to the story. The Japanese yen strengthened after Prime Minister Sanae Takaichi secured a decisive election victory on Sunday, reinforcing pressure on the dollar index. A firmer yen has historically coincided with stronger precious metals prices, particularly when it reflects shifting expectations around global monetary policy.
Beyond currency moves, analysts pointed to renewed bargain-hunting after last week’s sharp swings. Tim Waterer, chief market analyst at KCM Trade, said dip-buying helped propel gold back above $5,000, a level that has increasingly acted as both a technical and psychological anchor in recent weeks.
Attention is now firmly on U.S. macro data. Investors are awaiting monthly employment and consumer price reports later this week, which are expected to offer fresh clues on the resilience of the U.S. labor market and the trajectory of inflation. Market pricing currently implies expectations of at least two 25-basis-point interest rate cuts in 2026, with the first potentially arriving as early as June. Non-yielding assets such as gold typically benefit when rate-cut expectations firm, as the opportunity cost of holding bullion declines.
Waterer said any signs of softness in the labor market could further support gold’s rebound. While expectations remain that the Federal Reserve will hold rates steady in the near term, a sharper deterioration in jobs data could accelerate calls for easing. San Francisco Federal Reserve President Mary Daly added to that narrative on Friday, saying one or two more rate cuts may ultimately be needed to counter labor market weakness.
Silver, meanwhile, has once again outperformed gold. Spot silver jumped 3.7% to $80.89 per ounce after posting a near-10% gain in the previous session. The metal remains highly volatile after hitting an all-time high of $121.64 on January 29. Wong cautioned that silver still faces a key technical hurdle, noting that failure to clear resistance around $92.24 could weaken the probability of a sustained medium-term uptrend.
Other precious metals were more subdued. Spot platinum slipped 0.7% to $2,081.23 per ounce, while palladium eased 0.3% to $1,707.31, highlighting how gold and silver are currently absorbing the bulk of speculative and defensive flows.
As prices whipsaw, one segment of the hedge-fund industry has emerged as a major beneficiary of the turbulence. Commodity Trading Advisors, or CTAs, which rely on systematic, computer-driven strategies, have been actively trading the strong momentum in precious metals. These funds use quantitative models, statistical signals, and machine-learning techniques to identify trends across futures markets, reducing reliance on discretionary decision-making.
The surge in gold and silver over recent months has allowed trend-following funds to recover losses suffered during last year’s “Liberation Day” market turmoil. Importantly, performance has held up even after the recent pullbacks. Société Générale’s SG CTA Index rose 5% in January, while the SG Trend Index, which tracks the 10 largest trend-following hedge funds, climbed 6.9% by January 29. January marked one of the strongest months for the index since 2000. Both benchmarks remained up more than 4% year-to-date as of February 4, suggesting these strategies have managed to navigate the metals’ violent swings with relative success.
Andrew Beer, managing member at Dynamic Beta Investments, said the sector’s strength lies in its ability to adjust quickly. He noted that while last week’s sharp reversal in gold and silver likely prompted many CTAs to reduce risk, most remain positioned to benefit from further upside moves. Beer said the pullback amounted largely to profit-taking after funds had been early and contrarian in building positions in precious metals.
Industry data suggests that diversification across different time horizons has also helped. Short-term models, designed to react quickly to fleeting trends, tend to enter and exit positions faster, while medium- and longer-term models focus on broader macro themes such as yen weakness, sustained gold rallies, and asset allocation shifts away from U.S. equities. That blend has allowed funds to capture gains while limiting exposure during abrupt sell-offs.
Jon Caplis, founder and chief executive of hedge-fund data provider PivotalPath, said medium-term trend followers, which dominate its Managed Futures Index, have delivered consistent returns from several drivers, including long exposure to precious metals. He noted that even after sharp late-month sell-offs, gold finished the month up 9.3% and silver up 11.2%, underscoring why many systematic strategies remain profitable.
At the same time, silver’s increasing association with retail-driven “meme trade” dynamics has complicated the picture. Yung-Shin Kung, partner and chief investment officer at Mast Investments, said silver’s relatively low price and liquidity made it attractive for speculative retail activity, but those characteristics often clash with the requirements of trend-following models. As a result, some systematic funds may have trimmed exposure, helping them avoid the worst of silver’s most recent slide.
Together, the latest rally highlights how macroeconomic uncertainty, currency movements, and systematic trading strategies are reinforcing price action in gold and silver. With key U.S. data still ahead and volatility entrenched, precious metals are likely to remain at the center of both defensive positioning and quantitative trading strategies in the weeks ahead.