The Big Bet of 2016: Joining George Soros in Gold – by Stephanie Yang (Wall Street Journal – June 9, 2016)

There is a new gold rush on. Abating expectations for Federal Reserve rate increases have fueled a fresh boom in everything that glitters, from gold futures to the shares of gold-mining firms to exchange-traded funds that give traders a way to bet on gold’s daily rise and fall.

Front-month Comex gold futures have been among the best-performing major asset classes in financial markets this year, up about 20% as of Thursday. But those gains have been dwarfed by the surge in many gold-related securities, the latest sign of the topsy-turvy trading across markets in 2016 that for now has transformed some of the least-beloved investments on Wall Street into top performers.

The gains reflect a vast shift in investor expectations over the past six months. Many analysts and portfolio managers entered 2016 expecting the U.S. dollar to resume its rise as the Fed carried out a series of interest-rate increases. Instead, the dollar this week hit a five-week low after soft U.S. jobs data and comments from Fed Chairwoman Janet Yellen made clear that no increase is imminent, extending a commodity-sector rebound whose size and longevity have surprised many investors.

“It’s been an unbelievably quick change from despair to euphoria since the beginning of the year,” for gold miners, said Rick de los Reyes, who helps manage $1.4 billion in metals and mining at T. Rowe Price Group Inc.

Billionaire investor George Soros, who has recently returned to trading amid what he sees as coming economic troubles, in May disclosed a 19 million-share stake in the world’s largest gold producer, Barrick Gold Corp. DoubleLine Capital’s Jeffrey Gundlach has called for gold to reach $1,400 an ounce. On Thursday in New York, gold for August delivery settled up 0.8% at $1,272.70 a troy ounce.

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