With many commodities trading near five year lows some big time investors are returning to the sector. Only last week legendary investor Stanley Druckenmiller made a $323 million bet on gold. Whilst running the Duquesne Capital Management hedge fund between 1981 and 2010 Druckenmiller achieved a 30% annual return and never had a year in which he lost his clients’ money.
George Soros who famously broke the Bank of England in 1992 by beating against the pound recently invested $2 million in U.S coal producers and made a number of acquisitions in the precious metals sector. Does this mean the rich and powerful are expecting the price to rebound?
Precious metals experts Marc Faber, believes the downside risk is now limited and favours precious metals over base metals because they don’t depend on industrial demand.
Faber also points out that although emerging economies are currently struggling a further 3 billion people from the developing world will enter the middle class by 2050.