Volatility and uncertainty continue to sweep financial assets. Now is the time for investors to build a well-diversified portfolio that includes commodities, including gold, according to a market strategist. Strategist’s market comments and forecasts cryptocoin.com We have prepared for our readers.
Kristina Hooper: The argument for gold as an asset class is strong
Invesco’s chief investment strategist Kristina Hooper says tactically overbuying gold against other commodities could help weather the current storm caused by Russia’s war with Ukraine, which is entering its fourth week.
Kristina Hooper notes that as volatility becomes commonplace in the markets, gold is attractive around $1,950 and expects prices to continue to rise until 2022. However, he looks beyond the short-term trend in the current environment, noting that gold has proven its value as a long-term diversified asset. Kristina Hooper comments:
This is the year everyone will believe the diversification bible. The argument for gold as an asset class is strong. There may be years when you don’t think you need an asset like gold in your portfolio, until the time comes when you realize it.
“Rising inflation will continue to support gold prices”
The strategist adds that even if Russia’s war with Ukraine is resolved, the world has become much more uncertain. “You never know when the next geopolitical event will happen,” said Kristina Hooper, stating that it is not known when the next threat of inflation will hit, so it makes sense to buy commodities and gold long-term.
Kristina Hooper emphasizes that with rising geopolitical uncertainty, rising inflation will continue to support gold prices. However, she adds that it is still unclear how long consumer prices will rise. Russia’s war with Ukraine has turned the entire commodity complex upside down, raising prices and inflation. The strategist predicts:
The geopolitical events unfolding in the past month have increased inflationary pressures. There is no doubt about it. If this conflict is resolved soon, I am still confident that inflation will be by mid-2022.
Alongside the escalating conflict in Eastern Europe, Kristina Hooper says, the top risk right now is policy mistakes by central banks, especially the Federal Reserve. However, he adds that this risk remains low as the US central bank will follow a measured course.
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