Safe-haven demand pushes gold prices to a three-month high, but rising geopolitical tensions will create a sustainable bid for the precious metal, according to experts. cryptocoin.com We convey the comments of the experts…
Gold’s place in portfolios is “vital”
On Monday, editor Neils Christensen recorded a podcast with Phillip Streible, chief market strategist at Blue Line Futures. The guest was John Reade, chief market strategist of the World Gold Council (WGC). The trio talked about the health of the global market. Reade said safe-haven demand is positive for the precious metal, but prices could see a sharp correction if the conflict is resolved quickly. Rather than looking at short-term price volatility, Reade said, the World Gold Council’s research shows that gold plays a vital diversification role for any portfolio. The expert used the following statements:
We examined the strategic investment situations under the UK, Europe and Australia, Russia and Singapore. When we compared the assets that could be in a typical portfolio for each of these countries, we saw very similar results. Having gold somewhere between 4 percent and perhaps the higher 10 percent in your portfolio seems best suited to increase risk-adjusted returns.
Is the gold market in a good place?
The comments came after gold saw an interesting trend last year as investment demand for exchange-traded products lagged behind physical demand. In its annual analysis of the gold market, WGC reported that physical demand for the precious metal rose 10 percent to 4,021 tons in 2021 as 173 tons of gold were liquidated from ETFs.
Looking ahead to the rest of 2022, Reade said he thinks the gold market is in a good place, even as the Fed faces the prospect of raising interest rates seven times this year. “I think we’re going to have very interesting times in the markets in the next two months to two years,” he said. As for gold and Bitcoin, Reade said the two assets are completely different. He explained that while cryptocurrencies improve the return on a portfolio, they also add risk and volatility.
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