There is still steam left in gold rally

By Megan Durisin

Even after a lacklustre March, money managers are betting the best-performing commodity last quarter still has further to run. While gold futures have dipped from a 13-month high, hedge funds are the most bullish since January 2015.

Gold posted its biggest quarterly advance in three decades as turbulent financial markets and ebbing global economic growth boosted demand for it as a haven. London-based research firm Metals Focus expects investors to pour more money into metal as policy makers keep rates low to spur growth. Higher prices are lifting shares of producers including Newmont Mining and Freeport-McMoRan.

“Investment demand is there on the bullion end and obviously on the equity end as well,” Maria Smirnova, a portfolio manager at Sprott Asset Management in Toronto. “There’s a sea change going on around the world with the realisations that monetary policies have not been as effective as central banks had hoped. We don’t see inflation. That’s positive for gold right now.”