Gold Rebound Driven by Concerns Over US Fiscal Credibility and Geopolitical Shocks
Major global asset managers are rebuilding their gold holdings after a mid-year price correction. The rebound is driven by concerns over US fiscal credibility and persistent geopolitical shocks, with funds viewing gold as a necessary safety net against global macro-economic uncertainty.
Institutional buying is being driven by Amundi SA and Fidelity International, which have increased gold exposure significantly in recent weeks. This move marks a pivot in sentiment, with large firms holding gold as a long-term diversification tool rather than treating it as a speculative short-term trade.
The trend is occurring despite a challenging environment set by the US Federal Reserve's hawkish stance, led by Federal Reserve Chair Kevin Warsh's commitment to fighting inflation. Central bank purchases of gold in the second quarter also support prices, with global central banks recording their largest record 289 tonnes of gold buys.