The gold market has seen many momentum shifts in recent months. At the end of the day, however, the market really depends on one simple factor: Are the big money inflows trending in a bullish or bearish direction?

Near market lows, speculative interest tends to be heavily on the short (bearish) side. That sets the stage for buying pressure to be released when rallies force short sellers to cover their positions.

As traders shift to taking on more long (bullish) positions, momentum builds for higher prices.

Recent data suggests that hedge funds and large market participants are again ramping up their bullish gold positioning and that could take the yellow metal to previous all-time highs… or beyond.

Hedge funds have increased their bullish bets on gold and do not appear to be afraid of recent talk of Federal Reserve tightening sooner than expected.

The latest data from the Commodity Futures Trading Commission (CFTC) shows that hedge funds increased their speculative net long positions in gold by over 10,000 contracts.

Ray Dalio has placed hugely bullish bets on gold.

Billionaire hedge fund manager Ray Dalio has taken out a sizeable stake in gold, declaring “cash is trash.”

Dalio has also been dabbling in cryptocurrencies. But rival billionaire hedge fund manager Paul Singer calls them “ridiculous,” preferring instead to own tangible alternatives to cash, including gold.

Guggenheim's CIO Scott Minerdi is eyeing an ultimate price target between $5,000 and $10,000 per ounce. “As money leaves crypto and people are still looking for inflation hedges, gold and silver are going to be much better placed to go,” he said recently.

Of course, there are numerous reasons why hedge funds and other big players may want to get their hands on gold bullion. Rising inflation worries, easy monetary policies, and a weaker dollar to name a few.

With the stock market possibly at or near its high, the buying in gold has not been limited to U.S. market participants.

Players in other nations have many of the same concerns, and those concerns may keep gold well supported as it approaches its previous all-time highs.

According to IPE.com, a major Swiss pension fund has also traded in its hedge fund and raw materials holdings for gold.

This trend looks likely to continue, especially if precious metals markets continue to float higher.

Against the current backdrop of rising price pressures and a Fed that is willing to let inflation run hot for a long time, institutional interest in gold is likely to increase further.

Gold started the year around $1,918 per ounce, and a move back above that price could trigger additional buying and momentum upward, according to Blue Line Futures Chief Market Strategist Philip Streible.

The gold market tends to swing based on institutional trading momentum. As the yellow metal demonstrates strength, the amount of longs and size of long positions tends to rise.

The opposite is true when the metal shows weakness.

The current environment in gold suggests much further upside potential ahead.

Concerns over inflation, central bank policies, and currency weakness may all play a key role in gold’s rise. Additionally, a stock market reversal or period of risk-off trade could itself fuel further buying.

With little to no chart resistance above the market at current levels, the ascent in gold could be steep and could happen quickly. Once the train leaves the station, gold prices may not return to current levels ever again.