Global money management company BlackRock has issued a double warning about the benefits of keeping gold – now a traditional haven.
In addition, Ross Questrich, a portfolio manager at the Global Allocation Fund for BlackRock, said that bullion has proved to be a less effective hedge than other assets, such as stocks, as well as moves in inflation. In addition, gold is facing global economic recovery should accelerate.
Questerich said that gold “failed as a hedge against equity,” indicating that it had a stronger positive relationship with risky assets than technology stocks. According to Bloomberg, “Gold’s ability to hedge against inflation is somewhat depleted. While it is a fair stock of value in the very long run – think centuries ago – it is less reliable for most investment horizons, ” They said.
Bullion lost steam in 2021 as recovery from the epidemic gained more momentum and Treasury yields increased, though safely partially returned this week..
Blackrock believes that gold is not currently performing well against equity moves or inflation risk, although it has been effective against the dollar..
“In the absence of a strong view of the dollar’s decline, I will have less gold,” Questerich wrote, indicating that the precious metal still shows a strong inverse relationship with the US currency. And for those investors who are still looking to hedge, I am addressing one word: cash.
Spot gold was trading at $ 1734.57 an ounce in London this year at 7:19 am, while down more than 8% this year, while the US currency index rose nearly 2.%.