Blackrock Executive Says Gold Now Less Effective Hedge Against Inflation – Markets and Prices Bitcoin News

According to Blackrock, a portfolio manager and member of the Global Distribution Fund, gold is now a less effective hedge against inflation and against movements in other assets such as equities. In a commentary that seems to underestimate the known status of the precious metal, Russ Kosterich argues that gold’s ability to hedge against inflation is somewhat overrated.

Gold less reliable in most investment horizons

While Kosterich still recognizes gold’s status as a reasonable store of value over the very long term, he believes it is less reliable over most investment horizons. Kesterich’s company, Blackrock, which manages nearly $9 trillion in assets, appears to have already taken action on the new findings. As News reports, Blackrock has begun investing in BTC.

Nevertheless, as one report notes, gold has for years been considered part of a multi-asset portfolio that can help offset changes in other holdings, including equities. However, as this Blackrock executive notes, gold is not currently doing well as a hedge against equity movements or inflation risks, although it has done so against the dollar.

Fall in ETF gold volumes

To back up Kesterich’s claims, the report simultaneously relies on the precious metal’s recent performance against the dollar and U.S. stocks. The report, which contains data from 11. March used, says:

Spot gold was trading at $1,735.16 per ounce at 9:35 a.m. in London, down more than 8 percent this year, while the U.S. currency rose about 1.8 percent. The S&P 500, the benchmark index for stocks, is up nearly 4% in 2021.

In addition, the report notes that the fall in the price of gold in 2021 has been accompanied by a steady decline in the funds available in gold-backed exchange-traded funds. According to the report, global ETF volume has fallen to its lowest level since June, losing about 150 tonnes so far in 2021.

At the same time, the portfolio manager’s forecast for the precious metal alludes to possible obstacles for the commodity. Kesterich cites increased stimulus spending and improved vaccine distribution as reasons for the negative outlook, which points to the possibility of an economic recovery. Kesterich’s view on the outlook for gold is also shared by ABN Amro Bank, which warned in January that gold had peaked and would fall.

Do you agree with Kesterich’s view on gold? Tell us what you think in the comments below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Related Tags:

bitcoin stock price,how much are bitcoins worth,gold price stock,cryptocurrency prices,Privacy settings,How Search works

More from author

Related posts

Latest posts

Top 10 Crypto Stories of 2021 | Footprint Analytics Annual Report 2021

The cryptocurrency industry has come a long way in the last few years, and many of its most promising projects are still developing and...

The Rise of NFTs | Footprint Analytics Annual Report 2021

In the next five years, we expect to see continued growth of blockchain-powered digital assets and a major shift in how they are used....

Calamari Network Rolls Out Community Governance Measures As Decentralization Efforts Advance

The Calamari Network, a decentralized peer-to-peer digital content platform built on the EOS blockchain is announcing community governance measures designed to help achieve continued...