According to many, gold did not perform as well in 2021 as it did in 2020. In 2020, gold experienced a bullish move due to COVID-19 dynamics. However, the sharp contrast between last year’s and this year’s price movements is something that has been voiced by many market experts. BlackRock Inc. Fund manager Russ Koesterich pointed out that it is “not possible for gold to move as in 2020” and announced that the company has sold almost all of its gold holdings, with the expectation that real rates will normalize while the global economy recovers.
BlackRock executive announces he’s selling his gold
“Fourteen months ago, we had a very important position under it,” said Koesterich, director of the BlackRock Global Allocation Fund, in an interview with Bloomberg Television, and today we have reduced it to almost zero. “If our view is that real rates are somewhat normalizing, the commodity in question is unlikely to do as well as it did in mid-2020,” he said.
Gold fell more than 7 percent in 2021 after hitting a record high last year with a wave of investor money. The global economic recovery and high levels of inflation have increased the likelihood that central banks will reduce stimulus packages, which is thought to reduce the attractiveness of gold. It is thought that the US Federal Reserve may announce the timeline to reduce its bond buying at a meeting next week. Many market experts predict that the pace of reducing bond buying will be crucial for gold.
Koesterich: Gold will no longer act as a hedge against stocks
Koesterich said that expectations of higher inflation-adjusted returns on US bonds mean that the precious metal will no longer act as a hedge against equity markets. It also does not consider it the most effective hedge against short-term inflation. Citing the industrial, materials, and consumer sectors as examples, he said, “We would rather hedge some of the short-term rise in inflation with stocks that have the power to price out,” he said, rather than having an asset that does not provide cash flow.
Opening the week at $1,793 levels, an ounce of gold, which briefly rose above $1,800 on Tuesday, has dropped to $1,765 at the time of writing. cryptocoin.com As we have also reported, there was a sharp decrease yesterday, reaching the level of $ 1,753. The precious metal has lost 0.6 percent in the last 24 hours.
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