Gold Making More Gains In Generalist Market – Perth Mint
(Kitco News) - Gold continues to make further gains into the general investment psyche as one of the precious metal’s newest exchange traded funds sees strong growth in its first six months and attracts the attention of market analysts.
Jerry Hicks, Sales & Business Manager at the Perth Mint
In a telephone interview with Kitco News, Jerry Hicks, Sales & Business Manager at the Perth Mint, said that strong demand for safe-haven assets has driven assets under management in the Perth Mint Physical Gold ETF (NYSE: AAAU) above the $100 million milestone, since the launch in August.
The ETF also gained exposure last week during the Inside ETFs conference Hollywood, FL when Eric Balchunas, senior ETF analyst for Bloomberg Intelligence, named AAAU as his top new ETF pick in a panel discussion.
“To use Balchunas’ words: ‘It’s been a store of wealthy since before bitcoin; it was even a store of wealth before they invented the wheel,’” said Hicks.
The comments come as gold prices hold near a nine-month high, seeing gains of more than 3% since the start of the year. Spot gold prices last traded at $1,326.20 an ounce, up 0.36% on the day.
Hicks noted that gold’s attraction as an alternative asset rises as fear of a global recession continues to pick up. At the same conference, Nobel Prize-winning economist Robert Shiller said that there is an elevated risk of a recession in a year or two.
“Gold is the perfect hedge against a recession because it is not correlated to any other assets,” said Hicks. “As risks rise it’s time for investors to go back to basics.”
Hicks added that although growing interest among general investors shows the market’s strong upside potential, gold also has strong support as central banks are expected to add to their gold reserves.
In its 2018 year-end report, the World Gold Council said that central banks bought more than 161 tonnes of gold last year, the largest global purchase in 50 years.
“It’s hard to ignore gold as central banks see it as an important diversifier for their assets,” he said.
As for the growth the Perth Mint as seen in AAAU, Hicks said that what makes their product different from the other ETFs on the market is that this is the only gold product that is backed by a sovereign government.
The Government of Western Australia backs all the gold stored in the Perth Mint vaults. At the same time, the ETF offers physical redemption option and is competitively priced with an annual management fee of 18 basis points.
“Not only is your portfolio being diversified by gold but you have the added security knowing that it is being backed by a government guarantee,” he said.