Large Investors are Investing in Gold

Gold retested the resistance level of $1472 per ounce. However, as at the end of last week, the bulls were not able to overcome this 38.2% corrective fibo-level.

Prospects for growth have not yet been observed either from a technical or fundamental point of view. While maintaining the current price dynamics, it can be expected that an update in local lows and quotations should drop down to $1430.

In the short term, gold is under pressure from optimism regarding the signing of the first phase of a trade agreement between the US and China. If the agreement is signed in the near future, this could trigger a wave of sales by speculators in order to take profit.

In this case, the global economy will receive a certain impetus for development, and the short-term investors will become less interested in defensive assets such as Gold.

However, in the long run, large investors are building up their gold positions. Lord Jacob Rothschild, the head of the Rothschild family, in a six-month report by RIT Capital Partners said that their investments in the US dollar have been reduced and they saw other investment opportunities, namely in gold and other currencies.

Also, famous investor George Soros acquired a stake in the largest gold mining company Barrick Gold for the amount of $264 million and shares of the largest gold ETF-fund (SPDR Gold Trust) in the amount of $123 million. Thus, long-term investors often choose those assets, that will protect their capital in the event of an expected strong market correction.

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