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Gold to Rebound When Fed Pivots, FS Investments’ Gayeski Says

  • Strategist expects bullion may initially see ‘mild leg’ down
  • US central bank is expected to start easing in 12 to 18 months
Updated on

Gold stands to rebound when the Federal Reserve pivots to easier monetary policy after about a year, although prices may drop before that as it goes on shrinking its balance sheet, according to FS Investments.

The FS Chiron Capital Allocation Fund’s bullion exposure may rise from 4% once the Fed begins to ease aggressively, said Troy Gayeski, who joined the Philadelphia-based asset manager as chief market strategist in October. Before that “it’s rational to assume another mild leg down,” he said in an interview.