As Investors Flee Precious Metals for Stocks, Is Gold Finally Losing its Luster?

Last week, as the stock market recovered from a rough start to 2021, investors piled back into equities while pulling money out of other sectors like gold and bonds, according to data from BofA Global Research.

BofA’s weekly flows report showed investors put as much as $31.5 billion into equities while taking $1.8 billion out of gold and $15.4 billion out of bonds. Bond yields had spiked higher last week on the heels of more inflation fears, while high-flying tech stocks sold off and investors rotated into cheaper value stocks.

Looking at the data from EPFR Global, BofA said it saw the third-largest flows ever heading into emerging market stocks, with the second-largest into value stocks. The bank also noted the big outperformance of the Russell 2000 index versus the tech-heavy NASDAQ, saying:

“We believe 2020 marked a secular low point for inflation and rates.”

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