Hedge funds bet on gold as refuge from 'unfettered' currency printing

Section:

By Laurence Fletcher and Henry Sanderson
Financial Times, London
Tuesday, May 5, 2020

Some of the largest hedge funds are raising their bets on gold, forecasting that central banks' unprecedented responses to the coronavirus crisis will lead to devaluations of major currencies.

Paul Singer's Elliott Management, Andrew Law's Caxton Associates, and Danny Yong's Dymon Asia Capital are all bullish on the yellow metal, which has risen around 12 percent this year. They are wagering that moves to loosen monetary policy and even directly finance government spending, intended to limit the economic damage from the virus, will debase fiat currencies and provide a further boost to gold.

... Dispatch continues below ...


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"Gold is a hedge against unfettered fiat currency printing," said Mr Yong, founding partner at Dymon Asia, which is up 36 percent this year, helped by its bet on the gold price.

New York-based Elliott, which manages around $40 billion in assets, told its investors last month that gold is "one of the most undervalued" assets available and that its fair value was "multiples of its current price."

In a letter, Elliott cited the "fanatical debasement of money by all the world's central banks" as well as low interest rates and disruption to mining caused by coronavirus. Profits from gold positions helped the hedge fund to a gain of about 2 percent in the first quarter. ...

... For the remainder of the report:

https://www.ft.com/content/ecd9c6d5-6c42-4aa2-ae00-b741efd5af67

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