Big Banks Report Their Ultra-Wealthy Clients Are Rushing Into Gold
This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: The ultra-wealthy aren’t sold on the stock market recovery, Powell’s dovishness boosts gold prices, and Goldman rolls out yet another optimistic forecast for gold.
Big banks are moving their clients’ assets into gold as the stock market soars
Reuters recently spoke to representatives of nine big banks, which manage around $6 trillion of wealth for the world’s ultra-rich. And, in stark contrast to the action in the stock market, gold appears to be the asset of choice for both money managers and the clients themselves.
Of the banks that provided a forecast for gold prices, all four are calling for higher prices by the end of the year. Additionally, all nine have recommended and adjusted to a portfolio allocation of up to 10%. The respondents cited gold’s ability to shield investors against both inflation and deflation, as well as a variety of other downturns, as the main reason for rebalancing. As Lisa Shalett, Chief Investment Officer of Wealth Management at Morgan Stanley noted, the bank’s clients hardly needed convincing, sharing that Morgan Stanley’s wealthy clients, with decades of experience in investment, were particularly keen to hedge their bets with gold.
Representatives of UBS, Wells Fargo Investment Institute and JPMorgan Private Bank’s United Kingdom and Ireland branch likewise stated that client interest in the metal has increased exponentially over the past few months. Andre Portelli, co-head of investments at Barclays Private Bank, pointed out that the supply glut caused by the pandemic made his bank’s clients favor bullion over other options.
In terms of forecasts, JPMorgan’s Oliver Gregson sees $1,750 as a likely target for gold by the end of the year. UBS is slightly more bullish on the metal with a year-end target of $1,800, adding that a return of coronavirus-related issues could bring the metal to $2,000.
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