By Vince Lanci, GoldFix:
NEW YORK: Several asset managers have reduced exposure to gold mining equities after the shares began trading with meme-stock volatility that has decoupled them from bullion and undercut their traditional role as defensive hedges.
NEW YORK: Several asset managers have reduced exposure to gold mining equities after the shares began trading with meme-stock volatility that has decoupled them from bullion and undercut their traditional role as defensive hedges.
A NYSE gauge of gold miners has fallen 31 percent since the end of February, while the S&P 500 Index has gained 8 percent over the same period, according to
a divergence that has accompanied sharp, headline-driven swings across the mining complex. Brian Laks, chief investment officer of Old West Investment Management, has been trimming the Los Angeles firm’s gold holdings after bullion and related shares rallied to records and began behaving like speculative instruments, a shift from the defensive role they long played.
The shares have tracked the course of Middle East diplomacy in recent sessions, falling 4.8 percent on a Wednesday after renewed threats of US strikes on Iran, recovering the next session once those strikes were canceled, and closing 3.6 percent higher on Friday amid reports of progress toward a US-Iran agreement. Other managers have moved similarly, with Tuttle Capital Management cutting its gold and silver allocation to 5 percent of its actively managed fund from about 15 percent since the conflict began, and the VanEck Gold Miners ETF recording three consecutive months of outflows.
Continues at GoldFix:
The shares have tracked the course of Middle East diplomacy in recent sessions, falling 4.8 percent on a Wednesday after renewed threats of US strikes on Iran, recovering the next session once those strikes were canceled, and closing 3.6 percent higher on Friday amid reports of progress toward a US-Iran agreement. Other managers have moved similarly, with Tuttle Capital Management cutting its gold and silver allocation to 5 percent of its actively managed fund from about 15 percent since the conflict began, and the VanEck Gold Miners ETF recording three consecutive months of outflows.
Continues at GoldFix:
