[ad_1]
Al Marsad: BlackRock, a global money management company, has issued a double warning about the benefits of holding gold – the traditional safe haven for now.
Less efficient way
A portfolio manager of BlackRock’s global trust fund, Ross Questrich, said bullion has proven to be a less effective hedge against movements of other assets, such as stocks, as well as against inflation. Additionally, gold faces headwinds if the global economic recovery gains momentum.
Questrich said gold “fails as a hedge against stocks,” indicating that its positive correlation with risky assets is stronger than technology stocks. He added: “Gold’s ability to hedge inflation has been somewhat overestimated. Although this is a reasonable store of value in the very long term – centuries ago – it is less reliable in most investment horizons, ”according to Al Arabiya.net, citing Bloomberg.
A word for those who want to protect themselves from gold
“Without a clear vision for the dollar’s decline, I will have less gold,” Questrich added. And for investors who are still looking to hedge, I address one word: cash.
Vaccine distribution and elevated rates
“Greater stimulation and better distribution of the vaccine indicates the potential for an economic boom,” he added. If this happens, real rates are likely to continue to rise from still historically low levels. As was the case last month, this is likely a headwind for gold.
Source link
