If you’re a regular reader, you’ll know that 2019 has been a rollercoaster year for the stock market, with investors plagued by a seemingly endless US-China trade war and a whole host of other geopolitical and economic challenges, including civil unrest in Hong Kong, tensions in the Middle East and the on again, off again Brexit uncertainty.
This is good news overall for gold, which enjoyed a bull run all summer long, reached record highs and now, is being called a non optional asset by analysts from Lombard Odier Group an asset management firm based in Switzerland, it’s experts say that gold is the safe haven asset in the current environment and one that no investor can afford to have lacking from his portfolio.
In its report, it said “As gold has no limit on the upside and benefits from the rising share of negative-yielding bonds…, we see scope for the yellow metal to outperform significantly. We believe the negative yield environment will remain in place for euro and Swiss franc government bonds for the near future. This has profound implications for long-term portfolio construction. Specifically for CHF- or EUR denominated portfolios, where the yield environment is particularly low, gold will have an important structural role to play as a portfolio diversifier and a hedge against equity drawdowns.”
The report adds that, “gold becomes a necessity rather than an optional allocation” giving a further boost to the precious metal as we look towards the end of the year.
In addition to its assertions that gold is the most sensible and crucial of safe haven options, Lombard Odier Group analysts also foresee an opportunity for gold prices to climb heading into the New Year, with highs of $1650 on the horizon should a recession cause negative US bond yields. If not, expect $1,500 an ounce.
The key takeaway here? Buy now to get ahead of the safe haven wave.