Tags: emerging markets | US | gold | safety

Investors Return to Gold in Search for Safety

Friday, 28 Feb 2014 11:20 AM

By Dan Weil

Investors are snapping up gold this year, seeking a safe haven amid turmoil in emerging markets and signs of weakness in the U.S. economy.

Gold has soared 10 percent so far this year, after plunging 28 percent in 2013, its worst performance in 32 years. April gold futures traded at $1,329.90 on the Comex Friday morning.

"A reset needed to happen in gold," Michael Tiedemann, who manages $8.5 billion at Tiedemann Wealth Management, tells The Wall Street Journal.

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In the futures market, the amount of bets on rising prices have reached a four-month high, the paper reports.

And this month through Wednesday, SPDR Gold Shares, the biggest gold exchange-traded fund, saw a net inflow for the first time since December 2012, according to The Journal.

After selling gold in December, Tiedemann began purchasing SPDR Gold Shares last month and suggests that his new clients hold gold, the paper says.

Meanwhile, trouble continues to percolate in emerging markets, with political unrest in Ukraine and Venezuela. And U.S. fourth-quarter GDP growth was revised downward Friday.

"Gold has been playing its role as a great diversifier," Axel Merk, head of Merk Investments, tells The Journal. "This rally is for real."

Gold is on track for its biggest monthly gain since July.

"In general whether it's Ukraine, the U.S. economic data or worries about China, there seem to be a lot more reasons than there were six weeks ago for looking at gold," Nomura analyst Tyler Broda tells Reuters.

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