The recent gold transactions recorded by several mastodons of the bank show a jump in their stocks.
If gold has been on a hesitant path lately, it has shone brightly for a year, with a gain of 33% over the period. And since January 1, the yellow metal has even been one of the best performing assets, underlines Ivan Kralj, assistant fund manager Absolute Return at Jupiter AM. “The current context of low interest rates, quantitative easing (massive bond buyouts by central banks, editor's note) and depreciation of world currencies is the perfect combination for gold", Argues the expert.
The major economic stimulus measures taken by central banks “have raised concern among investors, who fear that fiat currencies will weaken as a store of value. Gold, however, is limited and cannot be printed, making it an attractive alternative investment”Explains Matthew Morgan, Multi-Asset product specialist at Jupiter AM. In addition, due to the collapse of interest rates observed around the world, the lack of intrinsic return on gold (which pays no dividend or coupon) is a less important consideration for an investor. The yellow metal thus benefits from arbitration phenomena, since it seems "relatively more attractive to diversify its portfolio than quality sovereign bonds", underlines the expert.
Finally, facing economic shock of coronavirus and the risk of a trade war between the United States and China, gold – a means of betting on fear, according to billionaire-philanthropist Warren Buffett – has benefited from its status as a safe haven. Investors often flee to the yellow metal – a store of intrinsic long-term value – in times of tension, notes in this regard Alastair Irvine, specialist in independent fund products at Jupiter AM. Since the start of the coronavirus crisis, most investment banks and asset managers have made positive forecasts on the price of gold, said Laurent Schwartz, director of Comptoir National de l'Or. And they went from words to deeds, given the evolution of their holdings in the two main listed gold physical funds, both American (the SPDR Gold trust and the iShares Gold Trust).
At the end of March, one month after the start of the coronavirus crisis, two banks held more than $ 2 billion in gold: Bank of America and Morgan Stanley. “It’s not surprising for the first one, which has a forecast price of the ounce at $ 3,000. But it’s Blackrock, the world's largest asset manager, that stands out by tripling its position and buying nearly a billion dollars in gold in the 1st quarter, "said Laurent Schwartz. The Swiss giant UBS and the American bank Wells Fargo, which also issued positive recommendations, have for their part strengthened their positions. In total, in the first quarter, "the gold holdings of these 5 financial behemoths increased by 2 billion dollars!", Reports the expert.