Fund managers’ ardour for gold cools as fears recede
Gold prices have traded in a broad sideways channel between $1,525 and $1,800 an ounce since falling back from a record $1,920.30 in September 2011, and have repeatedly failed to break back above $1,700 this year.
A number of leading portfolio managers have reduced their exposure over the past year or plan cuts this year in response to the receding threat of a euro zone collapse or US debt default.
Economic data has improved recently in both the US and the euro zone. Although a Reuters poll this month still pointed to soft growth on both sides of the Atlantic in 2013, the world economy is expected to perform better this year.
That optimism is rejuvenating interest in other assets, such as equities. According to Lipper, net flows to US-based equity funds in the first two weeks of 2013 were, at $11.3 billion, the biggest fortnightly inflow since April 2000.
Commodity fund managers said this month that they currently favour industrial metals such as copper and iron ore, as well as platinum and palladium, over gold.
“People are trying to understand whether we're in a recovery scenario, or whether there is another speed bump out there,” Clive Burstow, a fund manager at Baring Asset Management, said.
“I think you have to have an exposure to gold, because there are still headwinds... but you don’t need
Be the first to comment.