Gold continued its upward trend on Monday, getting close to $3,800 per ounce. Strong demand and ongoing economic uncertainty are boosting interest in safe-haven assets.
Even with these near-record prices, research from key institutions indicates that speculative excitement has not really kicked in, implying there may be further upside for gold.
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This cautious outlook is underscored by data from the latest Bank of America Global Fund Managers Survey, which reveals that 39% of fund managers currently hold no allocations to precious metals.
This percentage has decreased from 47% in August, suggesting that there might be untapped investment potential. Ryan Detrick, Chief Market Strategist at Carson Research, noted, “This is quite surprising, but it shows we haven’t yet reached a gold craze.”
Instead, the rise in gold prices is mainly fueled by strong physical demand from major markets and a flight to safety. For instance, China, which consumes more gold than any other country, saw non-monetary gold imports hit 104 tonnes in July, significantly higher than the five-year average.
In India, demand is anticipated to pick up with the arrival of the festival season. Darshan Desai, CEO of Aspect Bullion & Refinery, mentioned, “Starting today with the auspicious onset of Navratri, we may see some purchasing interest in the domestic market.”
He further remarked, “The ongoing global economic uncertainty is likely to continue supporting bullion prices.”
Other experts in the market maintain a positive outlook, noting potential shifts in their investment strategies. James Turk, the founder of Goldmoney, has set a target price of $4,000 for gold in the short term.
This optimism is echoed by economists like Peter Schiff, who highlights the adjustments to Morgan Stanley’s traditional “60/40” portfolio that now includes gold. As physical buyers and long-term strategists drive prices upward, there’s a question of when substantial institutional capital will join the rally.
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This article originally appeared Gold is approaching $3,800, but experts say, “We’re not yet near gold fever.” 39% of fund managers have a 0% allocation.
