In early September, Gold hit a high of $1,920 per ounce. It has since dropped to $1,655 per ounce as of October 7th. Reuters asked the best performing commodities funds, as ranked by Lipper, about their forecasts for the metal for the rest of the year.
The fourth ranked manager, Paula Bujia of the Schroders Gold and Precious Metals Funds, bought only gold and midcap gold mining companies. She is waiting for more selling of gold ETFs before adding to her positions. Her choices for stocks are Randgold Resources, Yamana Gold and Eldorado. They are predicted to have record earnings, increasing dividends and cash levels for their balance sheet. However, until the markets return to a more normal state, their stocks will continue to be under pressure.
The third ranked fund manager, Kurt Hug of the Antares Precious Metals Funds, thought that gold and other commodities would rebound in the near future. There are few other investments that investors can buy in a difficult market.
The top ranked fund is the LGT Dynamic Gold Fund. Peter Sigg of LGT Capital Management said that they were slightly leveraged in gold's run-up to $1,920 and slightly invested in cash during the retreat. He noted that in September 2008, gold prices fell in tandem with stocks and commodities and may do so in 2011.
The article can be accessed here.
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