Gold Prices Attract Big Buyers Amid Low Rates

Gold prices have seen a significant drop from their record high of $5,600 in January to under $4,000 in July. However, this decline has created opportunities for global asset managers to buy gold at what Michael Cuggino, president of the Permanent Portfolio Family of Funds, calls 'a very good buying time.'

The Netherlands' central bank moved 86 tons of gold from New York and Ottawa due to increasing geopolitical unrest, citing the need to strengthen resilience and preparedness. This trend is mirrored by a World Gold Council survey showing that 9% of central banks plan to diversify their storage locations over the next 12 months.

Official buying has normalized, with net central-bank purchases falling 54% in July. However, institutional investors are filling this gap, with Amundi SA buying bullion expecting a return to $5,000 by year-end. The Commodity Futures Trading Commission reported that funds' net-long position rose to its highest level this year.

Global physically backed ETFs drew $3 billion in net inflows in July, led by European-listed funds. Bridgewater founder Ray Dalio urged investors to put up to 15% of their money in gold to hedge against a US debt crisis.