US upswing could make gold less attractive, says Fidelity’s Trevor Greetham

A US led global economic upswing could threaten gold prices, Trevor Greetham of Fidelity Worldwide Investment has claimed.

Greetham (pictured), director of asset allocation at the investment fund manager, argues that the strength of the dollar, which is holding up well against the euro and yen thanks to the sovereign debt crisis and Japanese QE, will make gold a less attractive hedge.

Greetham said: “We do not see a compelling reason to hold out of benchmark positions in gold at present. Large retail flows into gold and still bullish survey readings suggest a significant downside risk if others come to the same conclusions.”

He argues that a US led pick-up in global growth would likely favour industrial metals such as copper, making gold less attractive in the asset class, while oil provides a better hedge against geopolitical shocks in the Middle East.

Gold struggles when dollar is strong:


Copper beats gold in a global upswing:


Oil is a more direct geopolitical hedge than gold:


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