A portfolio manager at Fidelity International said the fund he runs has doubled its gold holdings over the past three weeks, arguing that rising uncertainty around Federal Reserve policy was the main trigger for the move. George Efstathopoulos said he has already lifted gold exposure in the fund to his self-imposed 5% ceiling. If the U.S. dollar continues to lose ground as a safe-haven asset, he said he would consider raising that cap.
The shift came after the Federal Reserve’s July meeting, when investors sold long-dated U.S. Treasuries. Efstathopoulos linked that selling to what he described as a lack of Fed credibility and greater policy uncertainty. He also criticized the U.S. Treasury’s unexpected increase in long-bond buybacks, saying the move looked more like an attempt to influence yields than an effort to address the underlying reasons behind their rise. In his view, the gold market is now focused less on the fact that yields are moving higher and more on why they are rising.
On Aug. 24, BlockBeats reported that a portfolio manager at Fidelity International said the fund he oversees has doubled its gold holdings over the past three weeks.
George Efstathopoulos said increased uncertainty around Federal Reserve policy was the catalyst behind the move. After raising gold allocation in the fund to his self-imposed 5% limit, he said he would consider lifting that ceiling if the U.S. dollar’s status as a safe-haven asset continues to weaken.
He began adding to gold after investors sold long-dated U.S. Treasuries following the Federal Reserve’s July meeting. 「My understanding is that this is due to the Fed’s lack of credibility and rising policy uncertainty,」 Efstathopoulos said.
He also said the U.S. Treasury’s unexpected increase in long-bond buybacks looked more like 「manipulating yields, rather than addressing the root cause of why yields are rising.」
In his view, the gold market is no longer focused primarily on rising yields themselves, but on the reasons those yields are moving higher.
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