A report from Nasdaq finds that while gold is basking in a rush to safety, the safe haven metal might be facing a more uncertain future.
Gold bullion ETF SPDR Gold Shares is up over 27 per cent so far this year but New York Fed president William Dudley has hinted that the "possible" September hike may go against the metal. Dudley expects "growth in the second half of the year that'll be stronger than the first half – so some acceleration in the growth outlook."
Nasdaq writes that Dudley is optimistic about the economy attaining the 2 per cent inflation goal going forward. “All these talks may lead to speculation of a sooner-than-expected Fed rate hike, which has the potential to boost the greenback and weigh on gold as the metal is linked to the US dollar.”
Continuing the theme that gold is now overvalued comes the news that in the second quarter, Soros Fund Management offloaded the " majority of his shares in the gold miner and his full stake in mining company Silver Wheaton, according to regulatory filings."
Nasdaq reports that Barry Rosenstein's Jana Partners also resorted to the same route by cutting its stake in GLD. “There are analysts who believe that this mad rush in gold will eventually lose pace and that gold will return to USD1,200-USD1,250 by the end of the year. Notably, gold is trading at the USD1,350 level currently”