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According to a Reuters report yesterday (Thursday) some of the wealthiest investors in the world are being advised to heavily increase their gold holdings by financial experts, even as Wall Street begins to win back ground lost during the darkest days of the coronavirus pandemic. The news agency spoke to a total of nine of the most prominent private banks, including the likes of Morgan Stanley and UBS, the largest wealth manager in the world to understand how recent events have impacted on wealth management strategies.

Reuters says that while many private banks negated to advise their clients to store substantial amounts of gold before the emergence of COVID-19, the economic ravaging that has ensued has led to a total turnaround. The stance of many of the top private banks is that clients should now maintain at least 15% gold in their portfolio as a safe store of wealth.

This pivot is thought to have been provoked by fears that the world’s wealthy could see their fortunes hit hard by the risk of inflation, the devaluing of currency and the impact of central bank stimulus on bond yields.

The news agency says top bankers are also confident that gold will gain further value, even as stocks begin to stabilise. It  says, “While gold prices have already risen 14% since the start of the year to $1,730 an ounce, many private bankers bet that gold – a hedge for both inflation and deflation – has a lot further to run.”  All nine private banks contacted by Reuters were in unanimous agreement that substantial further gains were on the table.

UBS’s chief investment team said that a high of $2000 was possible and it expected at least $1800 by December.

Wells Fargo Investment Institute’s head of real asset strategy, John LaForge says the tides have already turned, with the super wealthy now actively looking to buy large quantities of gold. He said, “I’m now getting as many questions on gold as I do on oil, which says a lot from my perspective. Most people are interested in renewables and oil and so on, and gold was often considered a relic.”

The Chief Investment Officer of Wealth Management at Morgan Stanley, Lisa Shalett said gold was especially attractive right now. She explained, ““Our view is that the weight of monetary supply, expansion, is going to ultimately be debasing to the dollar, and the Fed commitments, which (are) anchoring real rates, make the case for gold pretty sturdy.”

The message is clear – don’t delay, buy now.

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