The outlook for gold, which tumbled into a bear market last month, remains bullish as central banks stick with printing money to weaken their currencies and revive growth, according to Threadneedle Investments. The London-based fund has not changed its positioning in gold after the slump, according to David Donora, a fund manager for commodities at Threadneedle, which managed 84 billion pounds ($131 billion) in assets, including equities and fixed income, as of March 31. Their top pick is oil-based energy such as Brent crude, gasoline, gasoil and heating oil, Donora said. Threadneedle joins John Paulson’s Paulson & Co. and hedge- fund firm Elliott Management Corp. in staying with bullion, which has slumped 12 percent this year as investment holdings contracted at a record pace. Prices had the biggest two-day drop in more than three decades last month. The U.S. Federal Reserve said on May 1 that it will keep for now the monthly pace of bond purchases at $85 billion to cut joblessness and boost growth. “I continue to be bullish gold for the longer term,� Donora said in an e-mail interview, without giving price forecasts. “The recent break in prices does not change that view. The key factor that continues to support that view is the active role that central banks are taking to weaken their currencies by printing money.� Gold for immediate delivery, which touched a two-year low of $1,321.95 an ounce on April 16, traded at $1,473.50 an ounce at 4:01 p.m. in Seoul. Holdings of exchange-traded products backed by the metal have slumped 369.8 metric tons this year amid speculation that the Fed will taper its stimulus program. Monetary Stimulus Bullion rallied for the 12 years through 2012 as emerging- market demand increased, led by China and India, and central banks kept interest rates low to boost growth after the global financial crisis. The European Central Bank cut its benchmark interest rate to a record on May 2, while the Bank of Japan announced unprecedented monetary stimulus last month. John Paulson, the biggest investor in the SPDR Gold Trust, told investors in a letter last month that he remained bullish because central-bank stimulus will eventually spur inflation. Hedge funds increased bets on a gold rally by the most in three weeks as of April 30, U.S. Commodity Futures Trading Commission data show, as central banks signaled no end to economic stimulus. Oil-based energy such as Brent crude and heating oil have the “strongest fundamentals and structure,� Donora said. “Additionally, there’s a heightened degree of geopolitical risk among a number of producing nations, which puts production at risk. Any significant pullback in the price of products will be met with significant increase in consumption.� Brent crude traded at $104.60 a barrel today, gaining for a third day as air strikes in Syria renewed concern that unrest will spread in the Middle East. That narrowed this year’s losses to 5.9 percent. The Threadneedle Enhanced Commodities Fund, with more than $1.2 billion in assets, returned 2.64 percent in 2012, beating the average of minus 1.87 percent by peers, according to data compiled by Bloomberg. To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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