Gold Should Be at the Top of Every Investor’s List
The comments below are an edited and abridged synopsis of an article by Neils Christensen
On an investment spectrum, gold is at the top, energy commodities at the bottom and base metals in the middle, according to Paul Robinson, managing director of research firm CRU. He said that gold is an important safe-haven asset for investors.
In the near-term, Robinson said that gold has room to move higher as fear surrounding the spread of coronavirus has yet to reach a peak in Europe and North America. He said that it is only a matter of time before that happens.
Robinson said that he expects to see higher gold prices through 2020, as markets move towards peak fear sentiment.
California has issued a state of emergency because of the spreading coronavirus, which has seen steady growth in the US. There are more than 1,000 cases in the US (90 in Canada), and more than 30 citizens (1 in Canada) have died as a result of the virus (case numbers as at the time of writing).
Although Robinson is bullish on gold as a safe-haven commodity, he is more cautious regarding the mining sector. Robinson said miners have to get through the latest turmoil caused by the spread of the coronavirus.
Market experts are trying to determine just how badly the virus will affect consumer demand, and if government intervention can change sentiment
Out of all the commodities, Robinson said that he is most bearish on energy commodities, as that sector has seen significant demand destruction as fewer people take trips.
Looking past short-term volatility caused by the coronavirus, Robinson said that his firm sees solid fundamental support for gold prices for the next two or three years. Along with strong investment and consumer demand, he said that dwindling supply will help keep a bid under gold.
Robinson said that falling mine supply will also continue to drive merger and acquisition activity through 2020.