The gold price has gained 24% in the five months since its November lows, with central banks buying record amounts of the metal last year. Having recently returned from a global conference in Miami, George Cheveley, Ninety One’s portfolio manager and metals and mining specialist, summarises in an interesting podcast (as per link below), the reasons for the commodity having seen such strong growth in recent months. He also explains why gold is perceived as a way of preserving wealth in uncertain times and why gold miners may be positioned for good performance in the months to come.
We have a small allocation to gold in our local Preserver Fund, which we have held for the last three years as a diversification from other asset classes and as a rand hedge. Looking ahead, gold should also become a more appealing asset class if global interest rates continue to decline, as the metal itself does not provide any dividend stream and consequently a greater “opportunity cost” exists to invest in the metal during higher interest rate environments.
https://ninetyone.com/en/south-africa/insights/why-gold-has-regained-some-of-its-lustre
