Managed-money investors increased net long gold positions on US commodity exchange COMEX to 170,634 contracts for the week to April 12, the highest level since September 2011, data from the US Commodity Futures Trading Commission showed Monday.
The figure is up 12% from 152,758 contracts the previous week and is the largest weekly addition for five weeks.
With each contract worth 100 oz, the total represents around 550 mt of gold.
Institutional investors have built up bullish positions only since January, coinciding with the surge in this year's gold price, after eight weeks of net short positions in November and December.
Gold has gained over 15% since the start of 2016, up to six-week highs around $1,260/oz last week on extended dollar weakness uncertainty around global monetary policy.
"Markets [have] become generally more nervous in the aftermath of the global financial crisis and this is one of the key factors that has amplified the change in sentiment towards gold this year," UBS precious metal analyst Joni Teves said Friday.
"Heightened risk aversion encourages holding gold as an insurance. Although an improvement in risk appetite would divert some attention away from gold, support would come from accommodative policy and lower rates," she added.
Gold was trading around $1,230/oz Monday morning.
Meanwhile, SPDR Gold Trust, the world's largest gold-backed exchange-traded product, showed weekly outflows of 5.35 mt for the week ending Friday.
After significant gains this year, up 176 mt from January to March, the fund is down nearly 7 mt in April.
Total assets in the fund now stand at 817.81 mt, down from a 3.5-year high of 823.7 mt in the last week of March.
Net long positions in silver were up 29.5% to a three-year high of 56,018 contracts, according to CFTC data.
Platinum was up 12.1% to 16,425 contracts and palladium was down 25.6% lower at 4,788 contracts.
