otavio costaa portfolio manager Crescut CapitalDisagrees with the notion that gold is no longer a good hedge during bad times and believes the yellow metal is in nascent stage It is re-emerging as a safe haven asset,
Costa highlights his disagreement citing Bloomberg Opinion piece by piece George Mason University Professor tyler cowen which argued that the yellow metal had become a cyclical asset and “no longer a useful harbinger of social and economic decline.”
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“This is completely backwards and dismisses the early stage of gold’s re-emergence as the ultimate haven asset. Given the dire levels of global debt, foreign central banks are looking to increase the quality of their international reserves.” are forced to prioritize. to support their monetary systems,” Costa Said in your tweet.
The expert explained that central banks act similarly to traditional businesses that need high-quality assets on their balance sheets to establish financial stability.
“Eventually, other notable institutions such as pension and endowment funds will follow suit. By the end of this decade, traditional 60/40 portfolios will probably become more balanced, with the inclusion of other asset classes such as gold,” Costa said.
Central banks have been increasing the share of gold in their reserves in recent days – they added 1,136 tonnes of the yellow metal to their reserves in 2022, more than in any year on record before 1950, one said. Reuters report published in February, cited world gold council,
Price Action: Spot gold was trading 0.28% lower at $1,902 an ounce during Friday’s Asian trade on the back of strong US economic data. federal Reserve Chair Jerome Powell He insisted that two more rate hikes were needed to bring inflation under control.
“Inflationary pressures continue to build up, and the process of getting inflation back to 2% has a long way to go,” Powell said,
SPDR Gold Trust GLD fell 1.4% in the last five days while iShares Gold Trust IAU There was a loss of 1.39% during this period.