24K99 News market analyst Mike Maharrey (Mike Maharrey) said that as concerns about inflation intensified, large fund managers began to join the gold ranks. Citi's analysis of large fund managers found that 83% of fund managers now go long on precious metals. Long positions in gold futures and options climbed, showing signs of bullish withdrawal prices.

Mahaleh mentioned that in the past few weeks, despite facing adverse factors such as a stronger dollar and rising bond yields, gold has held its ground. Geopolitical tensions have supported safe-haven buying, but it appears that a new player is entering the market, namely hedge funds and other large fund managers worried about rising prices.

According to a CNBC article in the US, “increasing precious metal holdings” has become the consensus of the largest fund managers.

Citi's analysis of large fund managers found that 83% of fund managers now go long on precious metals. Meanwhile, gold was the only commodity fund allocators added to their portfolios last month.

Earlier this month, net long positions in gold futures and options climbed to their highest level since the outbreak of the pandemic in 2020, according to the US Commodity Futures Trading Commission (CFTC), another sign of increased bullish sentiment in gold.

James Steel (James Steel), chief precious metals analyst at HSBC Securities (HSBC Securities), said in a recent report that the rise in gold and silver was driven by a “powerful cocktail” of safe-haven purchases and hedge fund purchases, “fueled by record high stock markets and sticky inflation.”

Livermore Partners founder David Neuhauser said he had increased the gold allocation to 20%, including gold and gold mining stocks.

“Since inflation is far above trend levels and is extremely viscous, it doesn't take rocket scientists to discover that gold can play a huge role. We are facing structural changes in inflation, and gold will become a metal where investors continue to worry about currency chaos and currency depreciation,” he continued.

David Einhorn of Greenlight Capital also uses gold as a large part of its fund allocation. He said, “There are problems with the country's overall monetary and fiscal policies, and I think the deficit is ultimately a real problem. I think it's a way to hedge against the risk of something not so good happening.”

Mahale stressed that it is clear that the Federal Reserve is not winning the fight against inflation. The US consumer price index (CPI) for March was once again higher than expected, and the overall price inflation rate rose to 3.5%. None of the figures in the report came close to the Federal Reserve's mythical 2% target. No matter how the numbers are split, split, or modified, there is no sign that the Federal Reserve is about to curb price inflation.

This has been obvious for a long time, but it often takes a long time for the mainstream to realize it. Maybe the financial world really needs some rocket scientists.

Last week, Federal Reserve Chairman Powell acknowledged that the fight against inflation was not progressing smoothly, and hinted that interest rates might stay high for a longer period of time.

“We've said we need to have more confidence in inflation before considering lowering interest rates. However, recent data does not give us more confidence that inflation is moving towards the 2% target,” Powell went on to say, “It is appropriate for restrictive policies to take more time to work.”

Chicago Federal Reserve President Austin Goulsby was even more outspoken that progress on inflation has stalled. The hawks turned to push the 2-year Treasury yield to 5%.

Over the past few months, the Federal Reserve's hawkish rhetoric could cause the price of gold and silver to drop. Higher interest rates are considered a drag on precious metals because they are non-yielding assets. But gold continues to hold its ground.

Mahale said, “Maybe the mainstream has finally understood what I've been saying for a long time, that inflation will eventually win this battle. When inflation occurs, you want to hedge against inflation. Even if the Federal Reserve does continue to cut interest rates, this is not a victory, but rather a capitulation. Once the central bank shifts to a loose monetary policy, it will cause more inflation. The reality is that monetary policy wasn't that tight in the beginning.”

“There is no doubt that interest rates will be cut, but I don't think they will because the Federal Reserve can vigorously claim that it has beaten inflation. The reason the central bank will cut interest rates is because a slight rate hike last year would damage the economy and trigger an economic and financial crisis. The current level of interest rates may not be enough to eliminate inflation, but it is enough to cause the bubble to burst in this debt-ridden economy. Without drugs that are easy to make money, it simply can't work.”

He concluded by saying, “I doubt the mainstream hasn't figured this out yet, but at least some large financial institutions have begun to understand the reality of inflation. Price inflation has attracted the attention of at least some large companies, and they are dealing with this by buying gold.”