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Source: Dubai – Sherif Al Yamani
Some of the world’s largest hedge funds are still betting on gold, hoping that the reaction of central banks to the Corona crisis may lead to a decrease in the price of the world’s major currencies.
Powell Singer of Elliot Management, Andero Laos of Cockton and Young Capital of Asia Capital condemned the rise in gold, which has increased 12% since the beginning of the year.
All three investment managers attributed their optimism to their expectations of central bank adoption of a concessional monetary policy, as well as governments’ direction of direct financing of spending, in an attempt to contain the devastating consequences of the viruses, which could lead to a decrease in the currencies of those countries and provide space for the increase in gold.
“Gold is a hedge against unregulated banknote printing,” said Young, founding partner of Damon Asia, whose shares have grown 36% this year thanks to his bid for gold.
Elliott, a New York-based company that manages $ 40 billion in assets, told clients that gold was “one of the most available assets priced less than its value,” and its fair price is more than the price. current.
The company’s investment in gold helped boost its profits by 2% in the first quarter.
And in London, where Caxton, one of the world’s oldest hedge funds, is operating, the company has also won investing in gold, either through futures or contracts that end with the actual delivery of gold bullion. The company’s mutual fund has gained around 15% since the beginning of the year, while the full-hedge fund has gained around 17%.
Gold has always been a tool to protect itself against crises and inflation, but it surprised everyone after it fell during the wave of sales that hit the stock markets in light of investors’ trend towards liquidity. Gold fell from $ 1,680 an ounce on March 9 to $ 1,450 an ounce on March 16, shortly before the S&P fell to its lowest level in 3 years.
Since then, however, it rallied to its highest level in 8 years, at $ 1,747 an ounce on April 14, and is currently trading around $ 1,700 an ounce.
Prices supported ETF’s significant increase in gold purchases, which increased 7 times during the first quarter.
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