‘A good hedge and reasonably liquid’: World’s biggest money managers are rebuilding gold positions
But they say a breakout above bullion’s recent ceiling near US$4,600 an ounce will not be smooth
The world's largest money managers are restoring their gold positions following a drop in prices, anticipating the metal's long-term relevance amid an assertive stance from the US Federal Reserve on inflation. Amundi, Europe’s biggest asset manager, purchased bullion expecting it to return to $5,000 an ounce by year-end 2026. Similar moves were made by Pictet Asset Management, Robeco Institutional Asset Management, and Fidelity International, which had previously reduced their holdings.
Lorenzo Portelli, head of cross-asset strategy at Amundi Investment Institute, believes gold is "cheap," a "good hedge," and "reasonably liquid." However, a breakthrough above the current $4,600 ceiling won't be straightforward, as higher Treasury yields and a potential Fed rate hike before the end of 2026 could weaken support for the precious metal. The Fed's resistance to slowing inflation was highlighted by Fed Chair Kevin Warsh's August 28 speech at the Jackson Hole symposium, which sparked bets on monetary tightening.
Despite these challenges, the renewed confidence in gold stems from its capacity as a hedge within a diversified portfolio. Arnout van Rijn, a portfolio manager at Robeco, notes that gold has become "part and parcel" of most investment portfolios. After a surge in January driven by speculative capital, which pushed the metal to an all-time high near $5,600, gold experienced a retreat to near $4,000 in June, spurred by factors like rising energy prices and Iran war-related inflation.
This downturn presented a buying opportunity, with funds recognizing the metal's enduring long-term macro narrative.
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