Investors are flocking to gold mutual funds and exchange-traded funds amid concern that the Federal Reserve’s continued easing program will spark inflation.
Legend Financial Advisors of Pittsburgh is putting some of its customers’ assets into First Eagle Gold fund (Ticker: FEGIX) and Van Eck International Investors Gold fund (INIIX).
"We're using these positions in more aggressive strategies as a bet on mining stocks following the price of gold," Jim Holtzman, an adviser at the firm, told The Wall Street Journal.
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Spot gold has risen 9 percent duringthe past three months, closing Friday at $1,670 an ounce.
The Fed recently launched another round of quantitative easing (QE3), and many experts expect more to come. "I don't see why we won't see QE4 or QE5," Joe Foster, manager of the Van Eck International Investors Gold Fund, told The Journal.
The U.S. fiscal cliff, Europe’s debt crisis and China’s economic slowdown also have turned investors bullish toward the precious metal.
"We have serious sovereign debt problems all around the world," Foster says.
Billionaire Canadian investor Frank Giustra is particularly enthusiastic about the precious metal. "I don't know when and I don't know how high. But gold is going a lot higher,” he said at a conference last week, according to Mining.com.
While gold is “the mother of all bubbles, it's the bubble people will go to when they've exhausted all other bubbles,” Foster said.
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