We initiated a position in gold (via an option spread) within our U.S. debt dynamics theme.

Background: 

In the coming year, we believe several factors have the potential to continue driving gold prices higher including: 
• Ongoing central bank purchases 
• Continued net inflows to gold ETFs 
• Increased hedging demand in the face of global trade and recession risks 

These factors are heightened by the emergence of a general de-dollarization (or at least a weaker U.S. dollar) theme. Additionally, the derivative markets are offering historically favorable terms to position for higher gold prices over the next year. We believe this option spread offers a more favorable risk/return profile compared to simply purchasing gold or gold futures.

 

Important information 

Investing involves risk, including possible loss of principal. Diversification may not protect against market risk. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice and is intended for educational purposes only. The information contained herein is for general and educational information purposes only and is not intended to constitute legal, tax, accounting, securities, research or investment advice regarding the strategies or any security in particular, nor an opinion regarding the appropriateness of any investment. This information should not be construed as a recommendation to purchase or sell a security, derivative or futures contract.

Information in the U.S. is provided by SEI Investments Management Corporation (SIMC), a wholly owned subsidiary of SEI Investments Company (SEI). 

Certain economic and market information contained herein has been obtained from published sources prepared by other parties, which in certain cases have not been updated through the date hereof. While such sources are believed to be reliable, neither SEI nor its subsidiaries assumes any responsibility for the accuracy or completeness of such information and such information has not been independently verified by SEI. 

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice and is intended for educational purposes only. There are risks involved with investing, including possible loss of principal. Diversification may not protect against market risk. 

The information contained herein is for general and educational information purposes only and is not intended to constitute legal, tax, accounting, securities, research or investment advice regarding the strategies or any security in particular, nor an opinion regarding the appropriateness of any investment. This information should not be construed as a recommendation to purchase or sell a security, derivative or futures contract.