Central Bankers’ Wisdom Faulted as Gold Holdings Surge 25%

“Firstly, the negative interest rate environment and quantitative-easing policies are reducing the pool of suitable investment options, and making gold less costly to hold,”  Aw said by e-mail on Monday, adding that while there may be more U.S. rate hikes in the pipeline, prevailing rates remain very low. “Second, lingering fears of competitive currency devaluations and potentially fresh bouts of market volatility encourage safe-haven demand.” 

Singer -- whose firm Elliott Management Corp. oversees about about $28 billion -- told clients last month that if investors’ confidence in central bankers’ “judgment continues to weaken, the effect on gold could be very powerful.” Stan Druckenmiller, the billionaire investor, said this month while the bull market in stocks is exhausted, gold is his largest currency allocation.

DYI