Out at event…Diversification Wins Again as Even the Pro’s Don’t Know about Gold

Today most of the day, I will be out of the office at a group client event, but of course happily tethered via technology and protected by our team here in Texas and in San Diego.

Gold and Other Commodities Tumble

A recent CFA poll of over 1000 professional investors leaves no doubt that no one really knows why the sudden tumble has occurred. (See Poll Below with links)

Diversification again has lead to safety!  Never go “all in” in today’s world!

Have a Great Day and a Super Weekend!

John Kvale

CFA Poll On Commodities

• What is the primary factor bringing the price of gold to its recent sell-off level of $1,400?
  

  Many large holders have announced their intent to sell	29.95%
  Another factor not identified above	28.96%
  Key technical barriers were breached	17.82%
  Inflation fears are subsiding	16.25%
  Lower uncertainty in the geopolitical climate	7.01%

• Poll analysis: In this week’s poll, 30% of the 1,211 respondents chose the response “many large holders have announced their intent to sell,” in line with what was reported about the Central Bank of Cyprus, George Soros, and others, whereas nearly the same proportion believe that the list of factors in the poll does not include what they consider the primary factor for the sell-off. Indeed, the cause of this sell-off, the largest in 30 years, appears to be quite complex, with most of the sell action in the COMEX, where 400 metric tons ($20 billion) were sold within a matter of hours, while reported physical gold demand remained robust, especially in Asia. Some referred to the sell-off in the Japanese bond market and other markets as an orchestrated bear raid. — Samuel Lum, CFA, Director, Private Wealth & Capital Markets, CFA Institute