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Taurus Sells All Silver After Rally, Maintains Gold

احدث اجدد واروع واجمل واشيك Taurus Sells All Silver After Rally, Maintains Gold

Jan. 21 (Bloomberg) -- Taurus Funds Management Pty sold all of the silver holdings in its $200 million precious-metals fund this month, saying the metal's rally has been excessive, while sticking with a larger bet on gold, according to an executive.

"We've cut all silver exposure, in physical and equity, simply because it went up too much in too short a period," Co- Manager Brenton Saunders said in an interview today. Taurus Precious Metals Strategy sold the 5.7 percent holding, and cut a further 1.9 percent in silver-mining shares, he said. Cash holdings surged to 8 percent from 1.4 percent last month.

Silver gained 83 percent last year as investors bought precious metals for protection against a weaker dollar and Europe's financial crisis. This year, spot silver has lost about 11.5 percent as holdings in exchange-traded products have fallen amid speculation the gains were overdone. Silver is this year's worst performer in the Thomson Reuters/Jefferies CRB Index.

"The correction is pretty healthy, we don't think it's a major inflection point," said Saunders, who co-manages the Sydney-based fund with Mohendra Moodley. Taurus Precious Metals Strategy returned almost 32 percent last year from February, when it started. Silver is "digesting the big moves," he said.

Immediate-delivery silver traded at $27.3625 an ounce at 2:55 p.m. in Singapore after peaking at $31.2375 on Jan. 3, the highest level in 30 years. Holdings in four exchange-traded funds tracked by Bloomberg News have dropped 2.6 percent to 14,772 metric tons from a record high set last month.

'Crowded' Trade

Silver may retreat as much as 20 percent this year as soaring demand for physical metal signals a "crowded" trade, Barry James, chief executive officer of James Investment Research Inc., has said. James oversees $2.4 billion.

Spot silver's slump this year has eclipsed a decline in immediate-delivery gold, which traded today at $1,347.30 an ounce, down about 5.2 percent in 2011. Platinum and palladium have gained this year.

Taurus has maintained its physical gold holdings at 77 percent of the fund, Saunders said, citing low borrowing costs and continued investment interest. "We expect it to do well," Saunders said. "Any reduction that we or other investors made in gold should be short-lived."

Saunders and Moodley also manage the Taurus Global Resources Hedge Fund, which returned about 2 percent last year since it was started in February. In all, Taurus Funds Management oversees $650 million.

--Editors: Jake Lloyd-Smith, Ravil Shirodkar

To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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