Fund Managers Finally View Gold as Undervalued

Fund managers are starting to view gold as a bargain.

According to Business Insider, in its latest survey of fund managers, Bank of America Merrill Lynch found the majority view gold as “undervalued.” In fact, this is the first time since 2009 that fund managers have marked gold as a good buy.

By Bank of America’s measure, gold is currently undervalued by about 1%. The current price sits some 40% below its all-time high in 2011.

In a note to clients on Monday, Rick Bensignor, chief market strategist at R.F. Lafferty, said that $1,150 — with a small margin either way — is a big price level for gold.

“At $1,159, gold hits a 61.8% Fibonacci retracement from its all-time high, a key technical support level.”

It’s important to remember that these fund managers rely on technical analysis to make their investment decisions. When it comes to fundamentals and long-term investment, gold has been a good buy for years. Nevertheless, when mainstream financial managers begin to eye gold, it could be a sign that the speculators may be ready to jump back on the bandwagon. It’s these short-term speculators who have a big influence on the price, which could make the second half of 2015 an exciting time for gold.

This represents a tremendous opportunity for long-term gold buyers. With central banks around the world continuing to pursue policies of quantitative easing and currency debasement, Peter Schiff is certain that prices will not remain at this level for the long-term. As we point out in our recently released report Why Buy Gold Now, the perfect storm is brewing – from both a technical and fundamental viewpoint – to send gold to new highs.

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