![]() ![]() “If central banks keep buying and flows increase into gold ETFs, gold’s rally should extend,” the BofA strategists said.Īnother driver of demand is fears about the U.S. Central banks are big buyers and their appetite for gold in 2022 rose 150 per cent to reach a 55-year high. Gold prices have been heading higher as investors pile in, worried about slowing economies, rising credit stress and geopolitical risks. Now, with a few growth stocks dominating the market, intra-index correlations are often more than 50 per cent. Thirty years ago, S&P 500 stocks were only about 10 per cent correlated. That’s especially true because the old ways of diversifying aren’t working as well anymore, they said. That makes it “best of breed” for portfolio diversification. “The shift from a two-per-cent world to a five-per-cent world means structurally higher inflation and interest rates, and gold is one of the few assets with no correlation to stocks (-0.01 per cent) that is also robust against stagflation,” they said. But these days, with corporate profits falling, inflation remaining high and major currencies losing their value, it is looking especially attractive, the strategists said. The precious metal has been seen for years as a safe haven in global economic turmoil. Gold is “that rare thing, an uncorrelated anti-stagflation hedge,” said BofA Global Research in a report entitled The new case for gold. This morning, it was trading at US$2,038. Over the past six months, it has climbed to a high of US$2,048 an ounce from US$1,710. In recent days, rising demand has pushed the yellow metal towards its record of US$2,075 an ounce. So why buy it?Ī good question, but plenty of people are. Gold has no cash flow, no major use in industry and there’s a fair amount of it on this earth. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |