Hedge funds and other money managers are increasing their investments in gold as the bullion continues to reach new highs due to rising inflation. A recent analysis by Citi of top investors overseeing over $18 trillion showed that 83% of them are long on precious metals, with gold being the only commodity they added to in the past month. Gold futures hit a record high above $2,400 per ounce this week, marking the third consecutive week of gains.
Investors are turning to gold as a safe-haven asset amidst geopolitical risks and reaccelerating inflation. James Steel, chief precious metals analyst at HSBC Securities, noted that the rally is driven by a combination of safe-haven demand and hedge fund purchases. Professional speculators have also increased their net-long positions in gold futures and options, with some hedge fund managers like David Neuhauser raising their gold weighting to over 20%.
David Einhorn of Greenlight Capital has also made gold a significant part of his portfolio as a defense against a potential market downturn. He believes that loose monetary and fiscal policies could lead to deficits, making gold a crucial hedge against such risks. Deutsche Bank has revised its gold price forecast to $2,400 per ounce by the end of the year and $2,600 by 2025 based on recent investment inflows impacting prices positively.
Hedge funds and other money managers are increasing their bets on gold as the bullion reaches new highs driven by reaccelerating inflation. A recent analysis by Citi revealed that 83% of top investors overseeing over $18 trillion are overweighting precious metals, with gold being the only commodity they have added to in the past month. Gold futures settled at a record high above $2,400 an ounce as geopolitical risks rose and inflation reaccelerated. Professional speculators’ net-long positions in gold futures and options are near their highest level since 2020. Prominent investors, such as David Neuhauser and David Einhorn, have significantly increased their exposure to gold in response to concerns about inflation and fiscal policies. Neuhauser sees gold reaching $3,000 over the next few years, while Einhorn views it as a defense play against potential market downturns. Deutsche Bank has also raised its gold price forecast, predicting it to reach $2,400 by year-end and $2,600 by the end of 2025 based on recent investment inflows impacting prices.
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