Fidelity International is preparing to rebuild its gold holdings, viewing a recent price correction as an opportune moment. George Efstathopoulos, a money manager at Fidelity International, significantly reduced his gold positions just days before a major price slide. Now, he indicates a readiness to purchase gold again if the market sees another 5% to 7% correction, stating that much of the "froth" has been removed, and the underlying medium-term factors supporting gold remain strong.
Another multi-asset fund manager at Fidelity International, Ian Samson, predicts that gold could reach $4,000 an ounce by the end of next year. This forecast is based on expected Federal Reserve interest rate cuts to buffer the US economy, a weakening dollar, and continued accumulation of gold by central banks globally. Samson noted that some cross-asset portfolios within the firm recently increased their gold holdings as prices eased from an all-time high of over $3,500 an ounce in April.
The broader trend in the market supports Fidelity's bullish outlook. A recent survey of 74 central banks revealed that 45% intend to increase their gold reserves in the coming year, marking the highest share since 2018. Only one central bank indicated plans to reduce its holdings, according to the World Gold Council and YouGov Plc. This sustained interest from central banks, coupled with a potential softening of the US dollar and interest rate adjustments, provides a favorable environment for gold prices to appreciate.
