Gold is an asset that can be invested in to diversify a portfolio, noted Capital Lab partner Evgeniy Shatov. The expert told Izvestia about the benefits of investing in this precious metal.
“Gold can be considered a type of money, that is, an asset with zero risk. Gold is also an asset that has a negative covariance with most risky assets, which allows it to be used to diversify any portfolio. Gold has a number of other useful properties: industrial use, and unlike any other currency, it is indexed for inflation over a long period of time,” he explained.
According to him, the most popular ways for investors to invest in gold are buying physical gold bars, shares of gold mining companies and buying gold ETFs.
At the same time, the expert did not rule out an increase in world prices for this precious metal in 2024.
“This year, the US Fed is expected to move toward easing monetary policy. The first rate cut may occur before the end of the year. Typically, lower interest rates have a positive effect on the price of gold, an asset that does not generate interest income. The profitability of dollar assets is declining. Another factor that will contribute to an increase in the price of gold this year is purchases from central banks (CBs), which continue to purchase gold for reserves,” Shatov explained.
He cited data from the World Gold Council, according to which, in 2023, central banks purchased 1.04 thousand tons, which is close to the absolute record of 2022 – more than 1.08 thousand tons. At the same time, the largest buyers are the financial regulators of Turkey and China, which are increasing the share of gold by reducing the share of the dollar and euro. The expert recalled that the situation with the freezing of Russian assets created a precedent that contributed to a decrease in the confidence of the central banks of the world in the dollar and euro as reserve currencies.
“Growing geopolitical tensions, the tense situation with the US budget – the issuer of the main reserve currency in the world, sanctions, freezing of private investor accounts, and so on – all this will continue to create additional demand for gold in the future,” Shatov concluded.
On March 15, Nikolai Pereslavsky, head of the “Support” department of CMS Group, expressed the opinion that in 2024, world gold prices could increase by 10–15%.
On January 17, VTB told Izvestia that, according to experts at the credit institution, the current year will be favorable for the gold market, the price of which may increase to $2.2 thousand per ounce by the end of 2024. Rosbank also predicted continued high demand for the precious metal.
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