Fund managers see gold market overbought as prices drop 3%
(Kitco News) - The $2,000 an ounce level is proving to be a significant obstacle for the gold market as prices saw a more than 3% drop in on Wednesday; however gold ’s current top hasn ’t come as a major surprise to some fund managers who saw the precious metals market overbought.
December gold futures last traded at $1,945.20 an ounce, down 3.37% on the day.
Tuesday, Bank of America released the results of its August Fund Manager Survey. According to the results, the gold market is the second most crowded asset in financial markets, only behind tech sector stocks.
The report said that of the total survey participants, 31% said that gold prices were overextended. This is the highest reading since 2011. Meanwhile, 31% of participants also said an equal-weighted stock, bond and gold portfolio is overvalued, the highest reading since 2008.
While sentiment was negative for the gold market, the survey showed a strong bullish bias for equity markets. Among those surveyed, 46% said that equity markets are in a bull phase; at the same time, 79% said they expect to see a stronger global economy over the next year.
The survey was conducted between August 7 and 13. An overall total of 203 fund managers with $518 billion worth of assets under management (AUM) participated in the survey.