Money Managers Rebuild Gold Positions Amid Fed Inflation Concerns

Major money managers have rebuilt their gold positions after prices dropped, betting that long-term drivers of the precious metal will endure even as the US Federal Reserve takes a more assertive stance on inflation.

Amundi SA, Europe's largest asset manager, bought bullion on the expectation it will return to $5 000 an ounce by year-end. Fund managers at Pictet Asset Management, Robeco Institutional Asset Management BV, and Fidelity International Ltd. also added to holdings cut earlier this year.

'Gold is an asset that we consider to be cheap, a good hedge and reasonably liquid,' said Lorenzo Portelli, head of cross-asset strategy at Amundi Investment Institute. However, greater visibility over the Fed's interest-rate path would be needed before the firm would consider adding to last month's purchases.

Without exception, each of the more than a dozen asset managers interviewed had either added back gold in recent weeks or were maintaining bullish allocations. Their firms manage a combined $27 trillion.