Has Gold Lost Safe-Haven Appeal? Portfolio Manager Otavio Costa Says That's 'Backward-Looking And Dismissive' Thinking
Portfolio Pulse from Bhavik Nair
Otavio Costa, a portfolio manager at Crescat Capital, disagrees with the idea that gold has lost its safe-haven appeal. He believes gold is in the early stages of re-emergence as a safe haven asset, especially given the high levels of global debt. Central banks have been increasing their gold reserves, with 1,136 tonnes added in 2022, the highest in records since 1950. The SPDR Gold Trust (GLD) and the iShares Gold Trust (IAU) both fell in the last five days.
June 30, 2023 | 11:00 am
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NEGATIVE IMPACT
The SPDR Gold Trust (GLD) fell 1.4% in the last five days. This could be due to the strong U.S. economic data and the Federal Reserve's plan for two more rate hikes.
The fall in GLD's price could be attributed to the strong U.S. economic data and the Federal Reserve's plan for two more rate hikes to control inflation. These factors could have led investors to shift their investments from gold to other assets.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The iShares Gold Trust (IAU) lost 1.39% in the last five days. This could be due to the strong U.S. economic data and the Federal Reserve's plan for two more rate hikes.
The fall in IAU's price could be attributed to the strong U.S. economic data and the Federal Reserve's plan for two more rate hikes to control inflation. These factors could have led investors to shift their investments from gold to other assets.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80