Gold buyers can still make profits as interest rates go nowhere, say top fund managers
There are still profits to be made from investing in gold, according to leading asset managers.
David Coombs, head of multi-asset at investment manager Rathbones, says that with interest rates going nowhere, for the time being, he remains a ‘buyer of gold at this level’. The gold price closed on Friday at just above £1,420 an ounce, 25 percent up over the past year.
Coombs’ confidence in gold is reflected in the fact that the biggest holding in the £700million Strategic Growth Portfolio he manages for Rathbones is a stake in a fund – iShares Physical Gold – that tracks the gold price.
Solid investment: The gold price currently stands at just above £1,420 an ounce, 25 percent up over the past year
His bullish view is shared by Ian Williams, manager of the Charteris Treasury Gold & Precious Metals Fund. He believes that the price of gold could hit £1,750 an ounce by the end of the year.
He says the price will be driven up by strong seasonal demand and continued uncertainty over the outlook for the global economy.
The Charteris fund has 25 holdings in mining companies. Among its biggest stakes are FTSE100-listed companies Fresnillo and Polymetal.
Williams believes commodity prices generally could be on the cusp of a ‘major new bull market’ with price increases for metals fuelled in part by the transition from petrol to electric cars.
Over the last year, the Charteris fund has generated a return of 60 percent.