Gold needs to be a core asset for all investors - Buchanan Webinar
(Kitco News) - Gold and mining stocks have become core assets to include in investors' portfolios as the global economy will feel the effects of the COVID-19 pandemic for years to come, according to a panel of market and investment strategists.
Speaking in a webinar Thursday, Michael Widmer head of metals research at Bank of America, James Burdass, gold specialist and independent consultant, Gervais Williams, fund manager at Premier Miton and Tom Attenborough, head of international business development and primary markets at the London Stock Exchange, all voiced their bullish sentiment for gold and mining stocks. The webinar was organized by British financial communications firm Buchanan.
Bank of America recently grabbed headlines in financial news after Widmer’s team of analysts said that they see gold prices pushing to $3,000 an ounce within 18 month.
Widmer said that the bank has been bullish on gold for a while and because of the COVID-19 pandemic, the market has been “supercharged” as central banks and governments have pumped financial markets full of liquidity. He added that in a low growth environment real yields will remain low and that is an important driver for gold prices.
“From as asset allocation perspective, it makes sense to hold a bit of gold in your portfolio,” he said during presentation.
However, there is someone who is even more bullish than Bank of America. Williams said that he sees gold prices pushing to $3,300 an ounce by the end of the year as interest rates go negative.
Williams added that over the coming months, generalist investors will be paying more attention to the mining sector as these are the companies that will be generating cash flow and dividends.
“Investors are going to need assets that are growth companies and provide dividends. The gold sector is a great area to invest in from this point of view,” he said. “We are not certain as to what the recovery is going to look like. The background is pretty uncertain but gold is resilient to these risks.”
Burdass said that he likes gold and miners as the global economy is going to be stuck with massive amounts of debt. He added that the impact the COVID-19 pandemic is having on the global economy will be felt for years to come.
“COVID-19 is going to be a game-changer for asset allocation in the gold market,” he said. “Gold as a store of value is unbeatable.”
Burdass said that he sees gold prices at $1,850 by the end of the year.
Attenborough said that gold’s rally in the last month with prices pushing to a 7.5 year high was an indication that gold should be a core asset in all portfolios.
“Generalist should see [the current environment] as an opportunity to include some gold in their portfolio,” he said.