MANAGEMENT-Gold should continue to shine in portfolios-OFI AM

PARIS, (Reuters) – Gold reached its highest levels in six years and the trend of price appreciation is expected to continue in the coming months, with the precious metal benefiting from several supporting factors at OFI Asset Management.

Gold, currently trading at around $ 1,500 an ounce, could grow between $ 1,900 and $ 2,000 in 18 to 24 months and exceed its historical high of $ 1921.17, reached on September 6, 2011, according to the management company.

The downward trend in production in the absence of the discovery of new deposits should support prices, as well as the growing purchases from emerging central banks, which reduce their dependence on the dollar, said Wednesday Benjamin Louvet , commodities manager at OFI AM, during a press briefing in Paris.

The most important element of support, however, is the fact that yields have virtually disappeared from the bond universe, he added.

"Gold has no return but nothing is better than less than nothing," he said. "Gold becomes a source of diversification when real interest rates are negative."

The high level of indebtedness of both companies and governments provides a guarantee against the rise in real rates, which argues for the integration of gold in portfolios, says the manager.

The context of low real interest rates and economic transition is favorable for gold, which also enjoys, in an environment of international tensions, the traditional protection it offers in the event of a geopolitical crisis, it is argued at OFI AM.

Gold is not the only one to benefit from a buoyant environment, other precious metals such as silver, platinum and palladium also enjoying, says Benjamin Louvet.

These metals are also used in industry, including palladium, which is used in the manufacture of catalytic converters, he says.

"As such, precious metals have a major role to play in the context of the energy transition," he says.

The price of palladium, higher than that of gold, is further supported by the closure of wells in South Africa, one of the world's two producers of this metal with Russia, explains the manager. (Patrick Vignal, edited
by Sophie Louet)

Sourse link

https://fr.reuters.com/article/frEuroRpt/idFRL5N2714E8