The Other “Great Rotation”

I’m not rooting against your precious metals positions so please don’t shoot the messenger…

From Reuters:

“It’s clear the funds are not coming in to support the market, and I don’t see any physical interest either. There has been a clear rotation out of gold and other commodities into equities,” said Bill O’Neill, partner of commodities investment firm LOGIC Advisors.

Is he correct? Are hedge funds really selling gold positions because they think accommodation from the Fed is going away? If so, then once they realize it isn’t going away will they come back? Or have they decided that equities and real estate are a better hedge anyway when inflation runs between between 2% and 5% (as the academic literature suggests)?

Source:

PRECIOUS-Gold dives to lowest since July on Fed, hedge fund talk (Reuters)