Citi cuts gold exposure on hawkish Fed outlook

Investing.com -- Citi reduced its gold holdings in its GMS portfolio and asset allocation after shifting its view on Federal Reserve policy direction.

The bank had previously added long gold spot positions based on expectations of a dovish Fed and a US Treasury buyback announcement. The initial positioning reflected a view that these factors would support gold prices.

The bank's stance changed following developments after the Jackson Hole symposium. A repricing toward a more hawkish Fed policy, along with a rally in energy prices, altered the investment narrative.

Citi's economist now anticipates a rate hike, prompting the reduction in gold exposure. The bank cited US interest rates as the primary driver for gold prices in explaining the position change.

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