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Why Are Hedge Funds Buying Record Amounts Of Gold?

Below you can see the price of gold going back to the 1990’s..

As you can see Gold is on the verge of breaking record highs, and in many people’s opinions this rise is only just beginning.

This week Oliver Fochler, Managing partner of Stone Mountain Capital, reported that the firm’s gold holding has increased by around 50% since the beginning of last year.

But he’s not the only one..

Multiple other hedge fund managers have recently mentioned their bullish take on the asset.  

Crispin Odey, who runs Odey Asset Management, has been increasing gold positions in Odey European. Sources say that holdings of gold futures now make up about half the fund’s net assets.

Why are they making these moves?

In the recent ‘In Gold We Trust Annual’ by incrementum they layout some very convincing reasons:

  • Monetary policy normalization has failed
  • The coronavirus is the accelerant of the overdue recession
  • Debt-bearing capacity is reaching its limits
  • Central banks are in a quandary when it comes to combating inflation in the future
  • Dawn of a new monetary world order

On their own any of these is a strong reason to increase the amount of gold in your portfolio, but when combined this move by many hedge fund managers starts to make more sense.

Gold’s Best Days To Come?

If you look back to the chart at the top of this page, you see that the year 2000 marked a huge year for gold. It was during this year that the chart at the top of this page started on its near vertical growth trajectory.

The year 2000 marked a peak in the U.S. GDP growth… 

A peak of technology investment and a new economy boom…

It was also the year of peak household income of the boomer generation…

And also the year when FED Chairman Alan Greenspan started talking about “doing whatever it takes” to keep the stock market rising. One way that manifested was in money printing… but in terms of tangible value it had a diminishing effect.

We will let you make your own mind up on the consequences of current actions. But if you do decide that increasing your lot of gold would be a safe bet Gold Investments always has a wide selection at competitive market rates to help you fulfill it.