Gold prices reached record levels this year. Moreover, it is still close to these levels and is resistant to decline. While some may expect a decline, there is good reason for investors to maintain their core positions in gold, according to one international bank. This is the geopolitical uncertainty that is pushing countries to move away from the US dollar.
Société Générale, gold for 5% maintains its position!
On Wednesday, French Bank Société Générale released its third quarter Multi-Asset Portfolio Strategy. He also announced that he is maintaining a 5% hold on gold even as it reduces overall commodity exposure. Updated positioning shows a two-point decline in the broader commodity basket, from 9% to 7%, as the bank continues to worry about oil prices. Analysts say that OPEC+ countries are trending downward in oil because they believe they cannot sustain production cuts. In this context, analysts make the following statement:
We foresee an increasing likelihood that OPEC, particularly Saudi Arabia, will seek to regain market share lost at decade lows, such as at the end of 1985 or in 2014. We are clearly bearish on oil and that should discourage being too cautious in the investment profile.
““We are not changing our gold holdings before the US elections!”
Meanwhile, SocGen says it has no plans to change its gold holdings ahead of the US elections in November. “The Bank of Russia’s decision to freeze USD assets for an indefinite period will require central banks in the global south to purchase gold for many years to maintain their reserves,” analysts said. “Ahead of the US elections, we are holding our weight,” he says. Analysts do not expect gold’s uptrend to reverse anytime soon, even if prices consolidate below $2,350. They make the following assessment on this issue:
Gold was one of the highest-yielding assets in the first part of the year, ranking between Japanese and US stocks. Overbought, inflation stickiness, widening public deficits, geopolitics and diversification by central banks/monetary authorities support our long-held bullish view on the metal.
He made some changes in the bank’s portfolio, why?
SocGen’s downgrade of the broader commodities market comes as it seeks to free up cash and increase its exposure to corporate bonds. Along with its change in commodities, the bank also reduced its cash assets from 14% to 10% in the second quarter. Meanwhile, as recession fears eased, the bank increased its private credit exposure from 15% to 21%. Despite these adjustments, the bank says it maintains the general stance it has maintained since the beginning of the year. In this context, analysts underline the following points:
MAP accurately holds well-performing assets (Japan stocks, gold, US stocks; about 40% of the portfolio in total) while underweighting poorly performing assets (government bonds and inflation; only 15% of the portfolio in total). gave. This has been a generally stable distribution. Over the last 12 months, as the balance shifted from bonds to stocks, we adjusted the portfolio but did not fundamentally change it. This is because we are stuck in the same market segment. We believe that we are still in the same rank and accordingly we maintain a balanced distribution.
cryptokoin.comAs you follow from , US inflation has started to cool down. However, the Federal Reserve remains cautious about lowering interest rates. Analysts say they don’t expect to see any significant changes in the portfolio until the Fed lowers interest rates. They also note that, given the resilient strength of the U.S. economy, the Fed may not begin lowering interest rates until 2025.
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