Geoff Yu from BNY highlights that positioning in Emerging Markets (EM) equities is heavily skewed toward South Korea and Taiwan. Meanwhile, other parts of EM are seeing historically low allocations. This shift is driven by China's weakness and poor EM data, which have already led valuations to price in disinflation and weak growth.
Implications for the Gold Market
The weakness in emerging markets might drive investors to seek safer assets such as gold. When investors become concerned about economic prospects, demand for gold as a protective asset often increases, potentially driving up its price.
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