Some of Wall Street’s largest fund managers have taken a contrarian bet on gold, wagering that U.S. President Donald Trump’s governing style and upcoming elections in Europe will combine to create more stock market volatility and boost the prices of a metal long seen as a safe haven. Fund managers from IVA, Ridgeworth and Fidelity are among those who are bullish on gold at a time when the VIX, Wall Street’s main measure of volatility is near two-year lows amid a stock-market-rally that has pushed the P 500 up 6.5 per cent since Election Day in November.
Charles de Vaulx, portfolio manager of the eight billion dollars IVA Worldwide Fund, said the U.S. stock market had been “amazingly unvolatile. With the unpredictability of President Trump and how well he works with Congress, there remains a lot that is unknown,” he added. De Vaulx said Trump was short on specifics of his spending plans which could undercut the value ofthe dollar and push gold prices higher. At the same time, upcoming elections in France and Germany could have a long-term impact on thefuture of the European Union, leading to more stock market volatility.
The dollar was on course to its worst start in more than a decade on Tuesday after Trump commented on currency devaluation by other countries and his new National Trade Councildirector remarked on the euro.Spot gold prices rose 1.6 per cent to 214.19 dollars an ounce with analysts citing the uncertainty of Trump’s policies as a main factor..In spite of the recent moves, gold has been one of the worst-performing assets since Trump’selection. Gold prices are down 5.5 per cent since the election and have fallen 10.5 per cent over the last six months.US economic growth, cutting into the appeal of the metal.
SOURCE:THE GUARDIAN
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