Gold has fallen so far out of favour that even as Greece lurches
closer to a possible exit from the euro, investors are shunning the
metal known for being a haven.
More than $300m has been wiped from
the value of exchange-traded products backed by the metal in the past
month, data compiled by Bloomberg show. Money managers are holding the
smallest net-bullish wager since 2006, US government figures show.
As pressure grows on Greece to come up with a plan to stay in the euro after voters said no to more austerity, gold’s volatility is tumbling and prices are languishing near a three-month low. Bullion has slumped about 40% since reaching a record in 2011 as investors ignored the metal in favour of equities and the dollar.
“Too many of the people who bought gold late in the rally have been scared off,” said Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors who exited gold in 2014.
“Regardless of the fundamentals, regardless of what’s happening now, people simply won’t go back to it.” Huntington oversees $1.7bn.
Futures fell 1.5% this year to $1 166.90 an ounce in New York. The Bloomberg Commodity Index of 22 raw materials fell 4.9% in that time, while the MSCI All-Country World Index of equities rose 0.9%. The Bloomberg Dollar Spot Index jumped 5.3%.
As pressure grows on Greece to come up with a plan to stay in the euro after voters said no to more austerity, gold’s volatility is tumbling and prices are languishing near a three-month low. Bullion has slumped about 40% since reaching a record in 2011 as investors ignored the metal in favour of equities and the dollar.
“Too many of the people who bought gold late in the rally have been scared off,” said Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors who exited gold in 2014.
“Regardless of the fundamentals, regardless of what’s happening now, people simply won’t go back to it.” Huntington oversees $1.7bn.
Futures fell 1.5% this year to $1 166.90 an ounce in New York. The Bloomberg Commodity Index of 22 raw materials fell 4.9% in that time, while the MSCI All-Country World Index of equities rose 0.9%. The Bloomberg Dollar Spot Index jumped 5.3%.
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