The gold price suffered its steepest falls since the 1980s during the past seven days, including a decline on Monday of about $100 (per troy ounce) to $1,350. While the precious metal has since regained some ground, it remains substantially below its August 2011 peak of $1,900.
Almost half of Expert Investor Spain delegates – who comprised fund selectors from pension plans, private banks and family offices, as well as wealth managers and IFAs – forecast that the gold price would continue to fall over the following 12 months, and just 20% predicted a rise (see chart).
As a result, when asked how they planned to adjust their gold exposure during the next year, just 8% expected to increase their allocation and more than a quarter planned cuts. About half of delegates were not using gold in their portfolios.
Despite a gain of about 20% in the Nikkei 225 Index during the first quarter of 2013, there was a similarly low level of appetite for Japanese equities. This is in contrast with extreme fund manager bullishness on this market which – according to the Expert Investor Europe Manager Sentiment Survey for March – is at its highest level since the end of 2005.