Fund manager forecasts surge in gold price

David Bensimon, hedge fund manager at Polarcap Prosperity in Singapore, believes gold will double in price over the next two years. But he suspects that oil will give back some of the gains and trade within a tight range.

  • 12 Oct 2009
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Fear of inflation will continue to drive the price of gold but oil will trade in a narrow band in the next few months, predicts David Bensimon, hedge fund manager at Polarcap Prosperity in Singapore.

Bensimon bases his predictions on technical analysis and believes that gold will double over the next two years after it broke through US$1,000 an ounce in September. Gold futures were priced at US$1,050 an ounce at 12.15pm Hong Kong time on October 12, according to Bloomberg.

“Breaking past US$1,000 is a signal that gold has already resumed the bullish uptrend and is on the way to substantially higher levels over the coming year,” says Bensimon.

Gold prices have trended very closely to equities this year. Bensimon believes there will be a 10% to 15% correction in the S&P 500 between November and January as investors realise that the real economy has not turned the corner.

Yet he feels it is unlikely to have much bearing on the commodity. “It won’t give back as much because gold is held up by an inflationary bias,” he added.

“All the financial markets have risen so much in value in the last six months but the real world has not confirmed the recovery. And so the equity markets are vulnerable to sliding back again.”

A weakened US dollar, which has stoked inflation fears, will also boost the Australian, New Zealand and Canadian dollars which have “already resumed their uptrend and will keep driving forward”.

The Australian dollar is trading at US$0.90 and Bensimon expects that it will increase to US$0.98 in the first quarter of 2010. Similarly, he sees the New Zealand dollar, which is trading at US$0.73, rising 18% to US$0.88 by March 2010.

But Bensimon is not a bull on everything. Oil could give back some of the gains and then trade within a tight range after repeatedly failing to cross the US$73 a barrel threshold. WTI crude futures traded at US$72.24 a barrel at 12.15pm on October 12, according to Bloomberg.

“Oil is not favoured to break past US$75 a barrel immediately because the dynamics are different from gold,” he explained. “[Gold’s] move has been [because of] inflation-driven fear, while oil is more related to the reality of industrial and consumer demand.

“Oil, having so much difficulty getting past the US$73 range, is going to lean towards pulling back to the low US$60s range. However, a surprise upside break of US$75 a barrel would trigger a surge to US$90 a barrel.”

  • 12 Oct 2009

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 23 Jan 2017
1 Citi 8,013.43 23 16.84%
2 HSBC 4,701.26 20 9.88%
3 JPMorgan 3,857.21 16 8.10%
4 Deutsche Bank 3,334.38 12 7.01%
5 Bank of America Merrill Lynch 2,101.20 11 4.41%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 17 Jan 2017
1 Citi 2,421.53 5 33.29%
2 HSBC 937.89 2 12.90%
3 Itau BBA 916.67 2 12.60%
4 Bradesco BBI 900.00 2 12.37%
5 Morgan Stanley 800.00 1 11.00%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 10 Jan 2017
1 Standard Chartered Bank 295.00 1 32.24%
1 HSBC 295.00 1 32.24%
1 Credit Agricole CIB 295.00 1 32.24%
4 Mitsubishi UFJ Financial Group 30.00 1 3.28%
Subtotal 915.00 2 100.00%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 JPMorgan 195.08 50 10.55%
2 Goldman Sachs 162.26 37 8.77%
3 Morgan Stanley 141.22 46 7.64%
4 Bank of America Merrill Lynch 114.20 33 6.18%
5 Citi 95.36 35 5.16%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
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  • 17 Jan 2017
1 UniCredit 4,163.05 29 12.35%
2 ING 3,184.83 25 9.45%
3 SG Corporate & Investment Banking 2,911.64 17 8.64%
4 Citi 2,741.75 18 8.13%
5 HSBC 1,822.32 18 5.41%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Jan 2017
1 State Bank of India 262.46 3 12.40%
1 Citi 262.46 3 12.40%
3 Standard Chartered Bank 242.57 3 11.46%
4 Mitsubishi UFJ Financial Group 191.19 2 9.03%
4 DBS 191.19 2 9.03%