Q: In the last while, gold and shares in gold producers has until the US election enjoyed a very positive run. There has been quite a downturn. What is your outlook for gold and the producers? If you owned, would you be winding down some positions? Thanks for your excellent service.
5i Research Answer:
We don't think gold has lost its glitter; gold is down as the US dollar is extremely strong following the Trump victory. There are questions as to how this may impact future interest rate movements from the FED. Gold is sensitive to both the US$ and rates. But we do not think the long term underlying trend towards gold has significantly changed. We would remain comfortable owning the sector within an appropriate size level.