Gold’s medium-term outlook is still constructive, and long-term investors should be using lower prices to re-weight their gold holdings, said Peter Hug, global trading director of Kitco Metals.
“There’s a bridge that needs to be gapped here until this vaccine gives everybody the confidence to go back and have this economy at full bore. That is, to me going to require additional stimulus,” Hug said. “The politicians might not do it, I think that’s going to really hurt the stock market, but if they do do it, I think that’s constructive for gold.”
In six months, it’s more than likely to get more stimulus which would drive gold to new highs. Monetary tightening would not happen before 2022, Hug added.
Hug said that investors should be allocating only a portion of their portfolio into metals and actively re-balance when needed.
“A balanced portfolio is the smartest way to go. Part of that balanced portfolio should hold hard assets, whether that’s gold, whether that’s real estate, whether that’s oil, you need a component of your portfolio in precious metals,” he said.
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