Wall Street firm says there is now a ‘strong case’ for gold over bonds, stocks
Bernstein is tracking two key measures, both of which are at levels not seen since World War II: global government debt and central bank buying of gold.
The firm argues that the current geopolitical environment is heading toward a period in which neither stocks nor bonds will work.
“We show that from current equity valuations and from similar points in previous cycles gold and equities give more similar returns … [to] risk assets such as equities,” Bernstein said.
Michael Sheetz
CNBC.com
2/11/2019
As recession fears rise, Bernstein is suggesting investors look to gold and gold mining stocks to reduce risk.
The firm’s global quantitative trading strategy group on Monday sent a note titled “a strong case for holding gold.”
“We show that from current equity valuations and from similar points in previous cycles gold and equities give more similar returns … [to] risk assets such as equities,” Bernstein said.
“A material shift in geopolitical risk and a near-record build up in government debt make other potential risk-free assets more questionable and also bring a temptation to create inflation, thereby further enhancing the case for gold,” Bernstein added.
Bernstein is tracking two key measures, both of which are at levels not seen since World War II: global government debt and central bank buying of gold. The former “creates a temptation to manufacture inflation,” Bernstein said. The latter is a “trend that is likely to continue for as long as the US share of global GDP continues to decline,” the firm said.
This is Bernstein’s key gold chart
The Rest…HERE
