Wealth management expert says now a good time to buy gold

A top wealth management expert said here Monday that the pull back in gold price to close to 1,200 U.S. dollars per ounce offers a buying opportunity.

Gary Dugan, chief investment officer (CIO) of wealth management at the largest bank of the United Arab Emirates (UAE), Emirates NBD, said as the dollar rose and the market moved to discount a rise in interest rates by the Federal Reserve, "gold has succumbed to profit taking by speculative investors."

In December 2015, the U.S. central bank raised the target range for interest rates from near zero percent to the range of 0.25 percent to 0.5 percent, which marked the first rate hike since 2006.

"We believe that commercial buyers have a better understanding of the underlying demand for gold and hence their buying interest suggests that the gold price remains well supported by long term trends," Dugan said in an emailed statement.

Dugan said in the last reported week, there was a huge decrease in gold speculators' long positions.

The "bulls," or investors who expect the yellow metal to gain in value, cut their positions by 45,218 contracts, "the largest reduction in history," Dugan said.

The net position of gold positions is still high by historical standards but no longer at the extremes seen in recent months, he said.

"We retain our view that gold remains one of the few hedges against the many factors that could spring downside surprises and waves of risk aversion," Dugan said. Endit