Fidelity's Gold Holdings Double, Betting on Fed Credibility Crisis and Decline of Dollar's Status

Fidelity International portfolio manager George Efstathopoulos stated that the gold holdings of the funds he manages have doubled in the past three weeks, primarily due to increased uncertainty surrounding Federal Reserve policies. He has raised the gold allocation to the set limit of 5% and is considering further increasing the allocation limit as the dollar's status as a safe-haven asset continues to decline. Following the Fed's July meeting, investors sold off long-term government bonds, prompting George to increase his gold holdings in this context. He pointed out that the lack of credibility of the Federal Reserve and the intensifying policy uncertainty are the driving forces behind this move. Additionally, George mentioned that the U.S. Treasury unexpectedly increased its repurchase of long-term bonds, seemingly manipulating yields rather than addressing the root causes of rising yields. He believes that the current focus on gold has shifted to the reasons behind rising yields rather than the rise in yields themselves.

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