The gold rotation

Big investors might not be rotating out of fixed-income yet, but a similar dynamic could be encouraging a shift out of gold and other commodities.

Gold’s collapse on Monday took prices back to where they were two years ago, representing a 15% sell-off from Friday’s high. There are plenty of theories going around to explain this, but one of the more interesting is a re-take on the Great Rotation.

Barry Ritholtz, who runs online quantitative research firm Fusion IQ, noted last week that the rotation out of bonds has not happened yet, but that there might be another kind of sector shift going on that could help to explain the recent weakness in gold and other commodities.

Many of the institutions that loaded up on illiquid and esoteric assets during the...

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