Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
One of the biggest disadvantages of holding gold in the portfolio has been the loss of interest income. For traditional portfolio managers, who are not active in the gold forward rate business of lending gold (Bank of International Settlements and other central banks are the dominant players) investing in god means part of their portfolio won’t earn any interest rates, which can be considered as cost of hedging the risk or cost of diversification.
However, as yields go down globally gold is losing its key disadvantage. The record easing by global central banks has led to the rise in negative yielding bonds, which means you are sure to get a lesser than the capital invested at maturity. At this level, loss to speculators who won’t be holding bonds until maturity but joined in to capture the race towards the bottom face an enormous risk should the bonds reverse even by a percent. Fitch has calculated that the investors could lose close to $4 trillion, should the yields rise to the level seen 4 years ago.
This year, the gold price has rallied more than 30 percent and the price actions strongly suggest that this rally has more potential to move higher. Gold is currently trading at $1337 per troy ounce. We expect the yellow metal to reach $1520 area and then move towards $1668.
