Oct 06: Gold’s recent price decrease has created a strong buying opportunity for 28% of institutional investors and wealth managers participating in global research* from ST0x, the onchain trading infrastructure for tokenised securities issued by S01 Issuer GmbH,
under an EEA base prospectus approved by the FMA Liechtenstein.
A further 48% of the 200 institutional investors and wealth managers surveyed consider the price decrease as a moderate buying opportunity, seeing the precious metal as worth adding while expecting prices to remain range bound in the short term.
One-fifth of respondents are taking a neutral or ‘wait-and-see’ position, holding current allocations and waiting for clear signs of a technical price bottom. Four per cent of respondents say gold’s investment thesis has weakened, and they expect further downside toward previous support lines.
Given the current market environment and gold’s valuation decrease, study participants plan to increase their gold allocations over the next six months. The biggest group (31%) will increase by between 3% and 4% while 23% will up allocations by 2% to 3%.
Around a fifth (19%) will increase by 4% to 5%; one in ten by 1% to 2%; 5% say by more than 5%; the same amount will increase allocations by up to 1% and 6% will maintain current levels.
When asked if they would consider using a tokenised gold ETF as a tactical vehicle to deploy capital rather than a traditional gold ETF, 23% of respondents say they would do so exclusively. Survey participants said the operational advantages including 24/7 trading, near-instant settlement make tokenised ETFs their preferred vehicle to capitalise on gold’s priced decrease.
More than half (58%) will partially allocate to tokenised gold ETFs noting they would split the investment between traditional and tokenised gold ETFs to test liquidity and infrastructure, the research across North America, the UK, continental Europe, the Middle East and Asia Pacific found.
Around 15% of respondents would consider using a tokenised gold ETF and are actively auditing tokenised issuers for future allocations, but they currently prefer traditional ETFs.
Nick Magliocchetti, Director, S01 Issuer GmbH said: “Gold’s recent price decrease is being viewed by professional investors as an opportunity to reassess and increase exposure, rather than a fundamental breakdown in the precious metal’s investment case.
“What is particularly interesting is the willingness of investors to consider tokenised securities referencing gold ETFs as a tactical vehicle for putting that capital to work. The combination of 24/7 access, near-instant settlement and the ability to deploy capital quickly could be particularly valuable when markets move sharply. While traditional ETFs will remain an important part of portfolios, tokenised securities referencing gold ETFs have the potential to give investors greater flexibility and precision when responding to short-term market opportunities.”
Looking at expectations for the spot price of gold (per troy ounce) by end of December, more than half (53%) of professional investors surveyed say $4,201 to $4,600 (Moderate recovery toward the 200-day moving average), while 28% forecast $3,800 to $4,200 (consolidation at current levels).
Some 15% predict $4,601 to $5,000 (strong bullish rebound); 2% say above $5,000 (new historical highs driven by renewed market shocks); and a further 2% say below $3,800 (further deep correction).
The price of gold is currently around $4,180 per troy ounce.