Nobody Is Paying Attention To Gold... For Now - Analysts
BOSTON - (Kitco News)- While there is no clear consensus on where gold isgoing in the near term, the one thing most participants at the LBMA 2018 preciousmetals conference can agree on that nobody is paying much attention to thespace.
“Gold is almost absent in traditional assetmanagement,” said David Seif, director and economist at Point72, in a paneldiscussion at the conference Monday.
“Gold has been the forgotten asset,” added DavidChang, commodity portfolio manager at Wellington Management. “Fifteen yearsago, asset managers appreciated gold’s role as a unique asset.”
Seif said that he doesn’t see a compelling reasonto own gold in the current environment. He added that the sell-off in equitymarkets -- which have had their worst month since the 2008 financial crisis --has been unjustified. Seif also said that he expects government fiscal stimuluswill continue to drive the economy for the next few quarters.
Looking at interest rates, Seif said that heexpects to see five more hikes before the Federal Reserve signals it is done.
“There needs to be a compelling story for hedgefunds to get interested in gold. In the last few years, that story has largelydisappeared,” he said.
However, Seif also said that he doesn’t see goldprices going much lower in the near term. “I’m not sure there is much room forshorts in gold, but I don’t see much upside."
On the more optimistic side, Chang said that he isthe most positive on gold in years. He added that he is not as confident aboutequity markets, and gold should continue to perform well as equities continueto correct.
“Having a position in gold has done a greatservice to our clients as it has lowered their overall volatility,” he said.
However, Chang added that gold needs to showconsistent gains to attract fresh investors to the marketplace.
Although Seif is not enthusiastic about goldthrough the next year, he added that rising inflation and an end to the currenthiking cycle will be positive long-term factors for the yellow metal.
“What gold really needs is for the Fed to signalthat it is done raising rates,” he said. “When that happens, that will be agood day for gold.”
By Kitco NewsFor Kitco News
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