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Professional investors who want exposure to gold are starting to put their money in gold-related shares rather than the metal itself.

Gold shares are being snapped up by fund managers in place of bullion, as the derating that has occurred over the past three years looks to right itself.

Alastair Mundy who runs the Investec Cautious Managed fund and Jon Rebak who runs HSBC Open Global Distribution have increased their exposure to gold shares and reduced exposure to gold bullion. Troy Trojan multi-asset manager Sebastian Lyon has gold shares and gold bullion dominating his top holdings.

There is a large disparity between the price of gold bullion – which has experienced an almost flawless 10 year bull run – and gold shares, but experts are predicting a re-rating. Production picked up in the second quarter to the end of June, buoying precious metal mining shares.

Chelsea Financial Services said that now was the time to buy.

"A stronger second half from corporates on the production front, a rising gold price and an oil price with limited upside should assist gold equities in providing earnings leverage," said Darius McDermott of Chelsea. "Longer term, as the market becomes more comfortable with ‘higher for longer’ gold prices, the equities should re-rate further."