George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors joins Keith Black, Managing Director at RIA Channel to discuss key drivers of gold’s performance in 2022 and beyond.
Today’s markets are experiencing inflation and rate hikes not seen since the 1970s, a time when gold soared. This time around, the Fed’s unconditional stance on taming inflation, alongside missteps abroad, has led to a very strong dollar. The performance of the US dollar has been the biggest headwind for gold, says Milling-Stanley on gold’s relatively soft performance in 2022. As the dollar reaches its peak and eventually runs its course, Milling-Stanley expects gold to rebound. A suppressed jewelry market, driven by the lingering effects of COVID in emerging market countries like China, has also served as a headwind for gold. On the flip side, a rise in emerging market central bank buying of gold has served as a major tailwind, a trend Milling-Stanley expects to continue.
While Milling-Stanley acknowledges that there are certainly tactical opportunities in gold, he suggests that the vast majority of investors would benefit the most from a long-term strategic allocation. Historically, a long-term strategic allocation to gold has helped mitigate risk, reduce portfolio volatility, and preserve wealth.
For more insights on this topic:
White Paper: Invest in Gold
Investing in Gold with ETFs
Research: Gold as a Strategic Asset Class
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Exp Date: 10/31/2023