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Some of the world\u2019s biggest money managers have rebuilt their gold holdings after prices dropped, betting that long-term drivers of the precious metal will endure even as the US Federal Reserve takes a more assertive stance on inflation.<\/p>\n
Amundi SA, Europe\u2019s largest asset manager, bought bullion on the expectation it will return to $5 000 an ounce by year-end. Fund managers at Pictet Asset Management, Robeco Institutional Asset Management BV and Fidelity International Ltd. also added to holdings cut earlier this year, during bullion\u2019s retreat from an all-time high.<\/p>\n
\u201cGold is an asset that we consider to be cheap, a good hedge and reasonably liquid,\u201d said Lorenzo Portelli, head of cross-asset strategy at Amundi Investment Institute. But greater visibility over the Fed\u2019s interest-rate path would be needed, he said, before the firm would consider adding to last month\u2019s purchases.<\/p>\n
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Gold extends decline as inflation risks pull yields higher<\/p>\n
That was a common theme in interviews with more than a dozen asset managers, whose firms manage a combined $27 trillion. Without exception, each of them \u2013 including BNP Paribas Asset Management and Manulife John Hancock Investments \u2013 had either added back gold in recent weeks or were maintaining bullish allocations.<\/p>\n
But any breakout above gold\u2019s recent ceiling near $4,600 an ounce won\u2019t be smooth, many of the money managers said. Higher Treasury yields and increased bets for at least one Fed rate hike before year-end are undermining support for bullion, an asset that tends to be less favoured when borrowing costs rise, because it doesn\u2019t pay interest.<\/p>\n<\/p>\n
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Investors\u2019 resolve was tested by Fed Chairman Kevin Warsh\u2019s Aug. 28 speech at the central bank\u2019s Jackson Hole symposium, where he warned that US inflation isn\u2019t meaningfully slowing toward a 2% target \u2013 comments that triggered increased bets on monetary tightening.<\/p>\n
So far, these potential speed bumps haven\u2019t shaken the renewed conviction of long-term investors. Gold\u2019s enduring appeal, some of the money managers said, lies in its value as a hedge within a broader investment portfolio.<\/p>\n
\u201cIt\u2019s become a much more acceptable asset,\u201d said Arnout van Rijn, a portfolio manager for multi-asset and equity solutions at Robeco, a Dutch firm that oversees some $464 billion in assets. \u201cIt\u2019s become part and parcel of every regular or normal portfolio.\u201d<\/p>\n
After a blistering rally backed by speculative capital took gold to an all-time high near $5 600 an ounce in January, the metal has spent much of this year in retreat. Elevated energy prices and inflationary shocks from the Iran war dragged it back to near $4 000 in June. That\u2019s when funds began to show interest.<\/p>\n
\u201cThe downdraft to $4 000, if you didn\u2019t own it already, was a very good buying time,\u201d said Michael Cuggino, president of the Permanent Portfolio Family of Funds. \u201cThe long-term macro story is still in place, and that\u2019s bullish for gold,\u201d he said, adding that \u201chigher highs and higher lows\u201d could be expected over time.<\/p>\n
For Robeco\u2019s van Rijn, the catalyst for buying gold again was an acceleration in central-bank purchases during the second quarter. Official-sector demand recovered sharply between April and June, with net purchases of 289 tons the highest for any second quarter, according to the World Gold Council.<\/p>\n
Sophie Huynh, a portfolio manager and strategist for dynamic-asset allocation at BNP Paribas, was drawn back by a fading correlation between bullion and risk assets like equities \u2013 a trend that suggests gold\u2019s traditional value as a hedge has returned after a period of speculative trading.<\/p>\n
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\u201cThe froth of gold has come off,\u201d said Huynh. Instead, the metal is being powered by \u201cfundamental drivers such as central-bank purchases and multi-asset managers looking for portfolio hedge,\u201d she added.<\/p>\n
That renewed appetite for gold is reflected in funds\u2019 net-long position tracked by the Commodity Futures Trading Commission, which rose in the week ended Aug. 25 to its highest level so far this year.<\/p>\n
In one of the starkest warnings of recent weeks, Ray Dalio, the billionaire founder of Bridgewater Associates, said investors should reduce their bond holdings and put as much as 15% of their money in gold to hedge against the risk of a US debt crisis.<\/p>\n
His comments came as long-term US Treasury yields rose to multiyear highs, a trend that prompted Treasury Secretary Scott Bessent to announce more buybacks of long-dated debt. The unexpected move caused gold to spike and revived interest in the so-called debasement trade \u2013 like central-bank buying, another pillar of gold\u2019s 2025 rally.<\/p>\n
\u201cYou\u2019re seeing money move out of the dollar and into hard assets \u2013 gold, Bitcoin being some of that \u2013 because there\u2019s a loss of confidence in our fiscal credibility,\u201d said Anthony Saglimbene, chief market strategist at Ameriprise Financial, referring to the US.<\/p>\n
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Bullion\u2019s recent recovery, added Kevin Khang, head of global economic research at The Vanguard Group, \u201cis very consistent with people being concerned about the US dollar again as a store of value.\u201d<\/p>\n
Some of the asset managers interviewed by Bloomberg News said alarm around the world\u2019s dominant reserve currency was overstated, but most agreed that a steady shift toward more diversified portfolios would provide a lasting platform for bullion to appreciate.<\/p>\n
Though there\u2019s \u201cno obvious replacement\u201d for the dollar, according to Christopher Hamilton, head of client investment solutions for Asia-Pacific at Invesco, that doesn\u2019t prevent investors from \u201cincreasing diversification at the margin,\u201d which may prove to be a more sustainable trend than any dramatic shift.<\/p>\n
Gold, after all, makes up a relatively small share of Western investors\u2019 portfolios, particularly after years of stunning gains in US equities. That means that even modest diversification has the potential to move bullion prices sharply.<\/p>\n
And no matter how the Fed tries to tackle inflation \u2013 and the effect of these efforts on the gold price \u2013 investors are still inclined to hold bullion as a counter to macroeconomic and geopolitical uncertainty, said Tracy Chen, a portfolio manager at Brandywine Global Investment Management.<\/p>\n
Gold \u201cshould still hold value as a hedge against what the Fed can\u2019t control,\u201d she said.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Worlds #biggest #money #managers #rebuilding #gold #positions<\/p>\n","protected":false},"excerpt":{"rendered":"
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