“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.

According to data released by the US Commodity Futures Trading Commission (CFTC), at the beginning of this month, net long positions in gold futures and options soared to their peak since the outbreak of the epidemic in 2020, which fully shows that the market's optimistic expectations for gold are growing.

This past week, Federal Reserve Chairman Powell frankly acknowledged that the fight against inflation had not yielded the expected results, and hinted that interest rates might remain at a relatively high level for a longer period of time. The Federal Reserve needs to ensure that inflation is more effectively controlled before considering lowering interest rates. Chicago Federal Reserve Chairman Austin Goulsby, on the other hand, pointed out more directly that the improvement in inflation has come to a standstill.

Market analyst Mike Maharrey (Mike Maharrey) pointed out that as concerns about inflation grew, large fund managers began to increase their investment in gold. Despite multiple challenges such as a stronger dollar and rising bond yields, the gold market has remained stable over the past few weeks. Geopolitical tensions have supported safe-haven purchases of gold, and new market players, namely hedge funds and other large fund managers worried about rising prices, have also begun to enter the market. Mahaleh stressed that some large financial institutions have begun to face up to the reality of inflation and take corresponding measures. The issue of inflation has attracted the attention of some large companies, and they have chosen to buy gold as a coping strategy.

James Steel (James Steel), chief precious metals analyst at HSBC Securities (HSBC Securities), mentioned in a recently released report that the rise in gold and silver prices was driven by a combination of safe-haven purchases and hedge fund purchases. This upward trend is taking place against the backdrop of record highs in the stock market and sticky inflation.

Livermore Partners founder David Neuhauser revealed that he has raised the gold allocation ratio in his portfolio to 20%, including gold and gold mining stocks. He believes that since the inflation rate is far above trend levels and is extremely sticky, the role of gold in investment portfolios cannot be ignored. In the face of structural changes in inflation, gold will become an important safe-haven tool for investors in the face of currency chaos and currency depreciation.

Greenlight Capital's David Einhorn also uses gold as an important part of its fund allocation. He believes that America's deficit will eventually become a real challenge. Judging from the current situation, the Federal Reserve did not win the fight against inflation. The US consumer price index (CPI) was once again higher than expected in March, and the overall price inflation rate has risen to 3.5%. None of the figures in the report came close to the 2% target expected by the Federal Reserve. No matter how these figures are adjusted or interpreted, there is no indication that the Federal Reserve is about to effectively control price inflation.