While gold prices remain mired near a five-month low, investor sentiment appears to be looking up for the precious metal.
The Bank of America Merrill Lynch Fund Manager Survey
for February of 196 fund managers, who oversee $559 billion of assets, shows that 40 percent of them expect the price of gold to rise in the next 12 months.
And only a net 3 percent of the fund managers now view gold as overvalued, compared to 20 percent in December.
Gold is trading around $1,200 an ounce and has climbed 2 percent so far this year.
"China's weakening outlook is weighing on global emerging markets equities, . . . but sentiment toward gold is improving," the survey states.
Meanwhile, a net 39 percent of the fund managers thinking crude oil is undervalued, down slightly from January. U.S. crude has rebounded 24 percent from their 5 ½-year low, trading around $52 a barrel.
Peter Schiff, CEO of Euro Pacific Capital, is a raging gold bull. He thinks a weak stock market will force the Federal Reserve into a fourth round of quantitative easing (QE), which will push the dollar down. And when that happens, it's Katie, bar the door.
"What's going to be most bullish for gold is when the Fed announces QE4," he told Yahoo
. "That's going to be a big game changer. It's going to catch everybody by surprise."
Schiff believes gold will surpass its September 2011 high of $1,923 by early next year. That would represent a 59 percent surge from the present level.
The fact that so many countries are cutting interest rates and thus devaluing their currencies will boost the precious metal, Schiff said. "I think it's breaking out. Now is a good time to buy," he said.
"I think gold is going to go up in all currencies — it is rising faster in euros and some other currencies than it is in dollars but it's still rising in U.S. dollars. . . . In fact, this year I believe gold prices are going to hit all-time record highs in just about every major currency except the U.S. dollar."
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