Is it time to be greedy in the stock market with gold selling off

It has been a very interesting turn of events in markets year to date, with the volatility index, which is a key gauge of market sentiment, now up 80%.

There are several signals pointing to a much more bearish backdrop. Both gold and equities have seen significant outflows, with the GLD ETF recording its worst monthly outflow in more than a decade. Equity ETFs have also turned negative for the first time since April.

At the same time, hedge fund short positioning is moving back toward levels last seen around the 2021 market mania and the 2022 selloff. That tells us bearish positioning is building again.

Even so, after the brutal selloff in tech, we think the setup is becoming more interesting. The XLK technology ETF has been hit hard, but earnings and estimates across the sector are still growing strongly, and the sector now appears to be sitting near historical technical support.

Why Is Gold Selling Off Right Now?

We think the most interesting move has been in gold. The irony is that gold is being sold during an active Middle East conflict, even as the oil shock from that conflict is reigniting inflation and pushing the Fed to stay hawkish. Gold is normally seen as a safe haven and an inflation hedge, but that dynamic is clearly not showing up right now.

There are a few reasons for that. Gold had already pushed close to historic highs, which meant positioning was crowded and the market was vulnerable to a pullback. Once prices started falling, stop-loss orders were triggered and the selloff accelerated.

At the same time, with gold having run so hard, speculative traders have also been taking profits.

World Gold Council data for January 2026 shows central banks were still net buyers overall, adding 5 tonnes. The main reported sellers were Russia, down 9 tonnes, and Kazakhstan, down 1 tonne, while buyers included Uzbekistan, Malaysia, the Czech Republic, Indonesia, China, and Serbia.

That tells us the biggest selling pressure did not come from central banks. It came from the private and institutional side, with ETF outflows, particularly from US investors, driving most of the weakness in gold.

The investor’s takeaway

Today, Trump’s decision to delay attacks on Iran’s energy infrastructure has taken some pressure off markets for now. But what we should expect from here is continued volatility. In a market like this, where it is hard to find truly uncorrelated assets, cash looks like one of the more sensible places to be. Sharp swings in oil, inflation expectations, and risk sentiment are likely to continue, and holding dry powder gives us flexibility if better opportunities emerge.