Investors turn to gold for portfolio protection

Investors are turning to gold assets amid turbulent markets and the US/China trade war as they seek a place to shield their portfolios from volatility.

At a lunch organised by Pitcher Partners, resources specialists and corporate advisers discussed the resources outlook for Western Australia.

Gold was described as being in the ‘perfect market’ and a resource that thrives in otherwise detrimental markets.

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The price of gold bullion rose to US$1,528 an ounce as investors sought a safe haven amid the US/China trade war.

PCF Capital Group managing director, Liam Twigger, said: “This is the perfect market; today is the best market you’re ever going to see for gold and it’s probably going to stay like this for the next three years.”

Milan Jerkovic, chairman of gold miner Blackham Resources, said: “Gold is a proxy for the rest of the world. It is an unprecedented situation that we’re facing with an Australian dollar high gold price at a low exchange rate, which should last for a while.

“Other commodities, however, are struggling in an uncertain world. Of course, Donald Trump helps gold and there are investors out there that want real, physical things to hold on to, and gold is the logical answer to that.”

In light of this, investors had been buying into gold ETFs with ETF Securities reporting its physical gold ETF was approaching the significant $1 billion milestone in assets under management.

Kris Walesby, chief executive of ETF Securities, said: “The erosion in bond yields is a good indicator of the level of nervousness globally. The lack of any resolution to the U.S. China trade wars, unrest in Hong Kong, the cloud over Brexit, and signs of a slowing global economy mean investors are looking to shield their portfolios from volatility.”

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