There’s Still Steam Left in Gold Rally

Hedge funds are the most bullish since Jan­uary 2015 as gold’s safe haven sta­tus re­mains

The Economic Times - - Commodities Plus -

Me­gan Durisin

Even af­ter a lack­lus­tre March, money man­agers are bet­ting the best-per­form­ing com­mod­ity last quar­ter still has fur­ther to run.

While gold futures have dipped from a 13-month high, hedge funds are the most bullish since Jan­uary 2015. Gold posted its big­gest quar­terly ad­vance in three decades as tur­bu­lent fi­nan­cial mar­kets and ebbing global eco­nomic growth boosted de­mand for it as a haven.

Lon­don-based re­search firm Met­als Fo­cus ex­pects in­vestors to pour more money into metal as pol­icy mak­ers keep rates low to spur growth. Higher prices are lift­ing shares of pro­duc­ers in­clud­ing New­mont Min­ing and Freeport-McMoRan. “In­vest­ment de­mand is there on the bul­lion end and ob­vi­ously on the eq­uity end as well,” Maria Smirnova, a port­fo­lio man­ager at Sprott As­set Man­age­ment in Toronto. “There’s a sea change go­ing on around the world with the re­al­i­sa­tions that mone­tary poli­cies have not been as ef­fec­tive as cen­tral banks had hoped. We don’t see in­fla­tion. That’s pos­i­tive for gold right now.” — Bloomberg

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