Although the US Federal Reserve is reducing purchases of treasury and mortgage debt, its overall monetary policy remains pro-stimulus. Elsewhere, the Bank of Japan, the ECB and the Bank of England have all indicated that monetary policy will remain accommodative for the foreseeable future. Continuing accommodative monetary policy and negative real interest rates may result in higher inflation, which would be positive for gold and for general commodity prices. Conversely, any decline in economic data and further government spending cuts could result in deflation and systemic risk to the global banking system. The Fund expects to hold a neutral to overweight position in gold equities relative to the benchmark, with a preference for mid-tier and junior producers with attractive production growth profiles. The Fund’s preference for gold is based on our belief that gold-related assets can perform well in both inflationary and deflationary environments.