Fidelity manager who sold gold before the collapse is ready to buy it again

George Efstathopoulos, asset manager at Fidelity International, sold some of his investments in gold a few days before the biggest drop in prices for this precious metal in the last four decades. However, he has now said that he is ready to buy gold again if he sees a correction of another 5-7%, Bloomberg writes. Efstathopoulos became one of the first notable global managers to publicly express optimism about gold's prospects after the collapse late last week and early this week.

George Efstathopoulos, who is involved in managing about $3 billion in income and growth strategies at Fidelity, said the factors that drove gold to record highs remain unchanged, Bloomberg writes.

Early last week, even before precious metal prices collapsed from an all-time high, Efstathopoulos cut gold's share of the portfolio he manages to about 3% from about 5%, locking in a profit. He also sold gold when its price hit a record high of $5595.47 on Jan. 29 amid demand for protective assets, the agency points out.

However, on Tuesday, February 3, after gold prices fell by 13% in the two sessions preceding that day, the manager said that he is ready to buy the precious metal again: structural medium-term factors for the continuation of gold prices growth have already formed, according to Fidelity. But Efstathopoulos plans to buy the precious metal on the decline: "If we see another correction of 5-7%, I will buy", - said the manager, emphasizing that "much of the hype [around gold]", according to his estimates, has subsided. At the same time, inflation remains stubbornly high; also in favor of the metal plays a weakening dollar, large-scale purchases by central banks and diversification of investments by reducing investments in U.S. assets, said Efstathopoulos.

The Efstathopoulos fund, which has shown 20% growth over the past year, gets exposure to gold through exchange-traded funds, commodity ETFs and sometimes gold mining stocks. "Gold makes sense because it makes the portfolio more robust in terms of diversification," the manager says, and he plans to increase gold's share of the portfolio under his control to about 5% again, Bloomberg writes.

The positive view on gold, despite the collapse at the end of last week and the beginning of this week, is shared by some banks, including JPMorgan and Deutsche Bank. The former expects gold to reach $6300 per ounce by the end of 2026, while the latter maintains its forecast that the metal's value will increase to $6000.

Spot gold was up more than 3% on Wednesday, February 4, surpassing $5090 an ounce, after rising more than 6% a day earlier. At the same time, gold futures with the nearest delivery date rose on February 4 by more than 6%, breaking through the $4900 per ounce mark - the largest percentage gain for the gold contract with the nearest delivery date since March 2009, notes Seeking Alpha. The market is supported, among other things, by the escalation of geopolitical tensions between the U.S. and Iran, specifies Reuters.

This article was AI-translated and verified by a human editor