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The sell-off which could boost the gold price
Could the worst of institutional gold selling be over? With billionaire investor, John Paulson, dramatically reducing his exposure to exchange traded products, could this actually be good news for the long term gold price?
Saxo Bank's Head of Commodity Strategy, Ole Hansen, explains just what's going on. He suggests that Paulson may not have completely lost his appetite for gold. He says there are signs that he's moved out of ETFs and gone into the swap market, which can be slightly cheaper on the funding side. It's also easier for investors to be more anonymous.
Ole says Paulson's move indicates most of the big selling has been done which could leave some room to the upside as far as gold is concerned.
Certainly, the sentiment for gold is more positive than it was a few weeks ago. Ole says physical demand is strong and the technical break above $1,500 / ounce is significant. Ole says he could see gold moving towards $1,450 / ounce but the price isn't going to "run away"; concern over Fed tapering and rising bond yields are offering better opportunities elsewhere.
01:21 minutes
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