(Kitco News) – Blue-chip U.S. tech stocks are not only outperforming most of the market, they’re also encroaching on gold’s traditional role as a hedge against inflation and currency depreciation, according to the results of the latest Bloomberg Markets Live Pulse survey.
While 46% of survey participants chose gold as their number-one safeguard against rising prices, 30% said they would bet on American tech giants like Apple, Nvidia, Amazon, and Meta to outperform the precious metal against inflation.
Another surprising result was that even after Bitcoin’s phenomenal six-month run-up in price, only 5% of respondents chose it as their first choice to protect against inflationary pressures.
The significance of the results is even greater considering that price increases were also the number-one concern among respondents: 59% said rising inflation was the biggest risk facing financial markets for the balance of 2024. While inflation is well off the 9.1% peak set in June of 2022, it also remains well above the Federal Reserve’s 2% target and has ticked higher in recent months.
The poll only increases the anticipation for Wednesday’s U.S. CPI report for April, as market participants will be looking to see if price pressures will ease, or if the Q1 trend will continue higher.
But even as tech stocks grow to rival gold as an inflationary hedge, they continue to lose out to Treasury bonds in the event of a recession. Survey respondents’ views on the two asset classes’ performance in a shrinking economy were near-mirror opposites, with 61% saying they’d look to T-bills during a recession, while 62% said they wouldn’t hold the tech giants. Around 25% of respondents chose a U.S. recession as the top risk to the economy in 2024, the survey showed.
On the currency front, the U.S. dollar continued to be the first choice as a safe haven, with nearly 75% of respondents selecting the greenback, though opinions varied significantly according to region. In the United States and Canada, the dollar received 86% of the vote, against 12% for the Swiss franc and 3% for the Japanese yen. In Asia, the breakdown was 63%, 28%, and 9%, while in Europe, only a slim majority of 54% chose the dollar, with 43% favoring the CHF and 3% the JPY.
Spot gold is down nearly 1.00% at the time of writing, last trading at $2,337.46 per ounce.
