WGC: Gold to be an Excellent Complementary Asset
Consequently, investors are seen switching their holdings from risk assets to safer ones.
SEATTLE (Scrap Monster): The World Gold Council (WGC), in its latest report, says that Australian investors are seen reallocating to fixed income assets, amidst economic uncertainty. The growth outlook for fixed income assets is currently under threat from inflationary pressure. The report recommends considering gold as a long-term strategic asset alongside bonds.
According to Jeremy De Pessemier, Asset Allocation Strategist and Ray Jia, Senior Analyst, the Reserve Bank of Australia (RBA) has lifted its policy rate to 4.1% over the period from May 2022, as part of efforts to rein in inflation. In its latest policy meeting, RBA has predicted further growth slowdown. Consequently, investors are seen switching their holdings from risk assets to safer ones.
The WGC report noted that fixed income assets have emerged as a preferred choice among Australian investors, mainly driven by improved return potential during recent times. Although bonds are attractive, one should also view gold as an excellent complementary asset. Gold’s diverse sources of demand tend to make it resilient and give it the potential to deliver solid returns across market conditions, the report said.
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