Lamm: Gold's Price Decline is Temporary, Key Drivers Remain Intact
Australian hedge fund manager Raphael Lamm, whose L1 Gold Fund has delivered a net return of over 200% to investors since its launch last year, believes the recent decline in gold prices is temporary.
Lamm points out that the key drivers underpinning gold's long-term rally remain intact, including the unsustainable fiscal situations in key markets and growing central-bank allocations.
The L1 Gold Fund, which pairs long positions in gold-related stocks with a short position in gold futures as a hedge, has returned a net 235% through August since its launch in February last year, compared to a gain of about 148% for VanEck Gold Miners ETF and a 55% advance in physical gold prices over the same period.
Lamm's fund is using the decline in bullion to add to its long gold equity positions, with most holdings in companies valued at $5 billion or more. It also shorts some gold stocks it views as expensive or facing operational headwinds.