With gold rising last week by $50, more big banks and investment advisors are getting on the gold bandwagon. Reuters recently spoke to nine private banks, which oversee a combined $6 trillion in assets for the world’s richest clients, and most have advised clients to increase their allocation to gold, partly since gold is the only major asset class to rise in 2020. Four of the banks added forecasts of higher gold prices. 1st American Reserve wants you to be aware of this advise.
Morgan Stanley added a 5% position to commodities including gold as of March 31. While the bank said it is unlikely to advise a position above 10% in commodities, Lisa Shalett, the Chief Investment Officer of Wealth Management at Morgan Stanley, said they “could get there,” especially if inflation picks up materially. “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.” Super-rich investors, said Shalett, are “very concerned about wealth preservation and, in many ways, they have a longer historic lens than some of our other clients, so they do worry about inflation.”
UBS of Switzerland, the world’s biggest wealth manager, said that gold could hit $1,800 by year-end in their “base-case scenario,” due to ultra-low interest rates and investors seeking gold to hedge their portfolios, but they added that gold could reach a record high of $2,000 in the event of a second wave of coronavirus infections. UBS’ Kiran Ganesh said, “With the recent equity rally, people have become more nervous. People are actively seeking portfolio hedges that might perform well in a range of scenarios.”
Also, Wells Fargo’s head of real asset strategy at their Investment Institute, John LaForge, said, “I’m now getting as many questions on gold as I do on oil, which says a lot from my perspective.” And Oliver Gregson, head of the United Kingdom and Ireland at JPMorgan Private Bank said inquiries had gone up as clients increasingly viewed gold as “a port in a storm.” He forecast a $1,750 year-end target for gold. Call your experienced “Team Mike” representative to learn more!