Gold: Is the fear metal making a comeback?

    gold-grill

    As the global economy faces increasing uncertainty it seems gold has made a stunning comeback with the shiny yellow stuff hitting a five-week high yesterday after the minutes from the US Federal Reserve dampened hope of a September rate hike.

    As spooked investors flee to a safe-haven, spot gold rose as much as 1.8% to $1,154 an ounce. US gold for December delivery settled 2.2% higher at $1,153.20 an ounce, adding to its 1% climb the previous day.

    The prospect of a gold rush is surely making some people very happy. Among them is Stan Druckenmiller who recently bought $300 million worth of SPDR Gold Trust, an ETF that tracks the price of Gold. It’s his biggest position representing 20% of his fund.

    He isn’t the only one. Hedge fund giants John Paulson and David Einhorn, who were seemingly weighed down by their unpopular gold positions a few weeks ago, could now be vindicated. And do you know who else  is making bank on the back of gold? Donald Trump. That’s right. According to a recent FEC disclosure, the comb-over kingpin had a least $100,000 of the stuff squirreled away as of June.  

    But you know what they say about all tha glitters? Some analysts are not convinced that this will be a turning point for the commodity. Naeem Aslam, chief market analyst at Ava Trade recently told MarketWatch that gold has to see a lot more upside before we can decide whether  the metal has truly bottomed out. He said:

    “The tide has not turned for gold at all and we do not see this trend going for long unless the situation becomes completely out of control in China.”

    So maybe these guys better cash out soon. But then again, you could argue that things in China are already getting out of control.  

     Photo: Jeremy Noble