Case for holding gold – the Lombard Odier view
Repost from 7-22-2020
“At these levels, why own gold in a portfolio? The combination of low-to-negative government bond yields plus a weakening US dollar, and, most importantly, massive central bank accommodation, supports financial demand. This relationship between gold and real yields has held for the last decade and recent central bank interventions have reinforced the case for holding gold as a portfolio diversification tool. In addition, as investors consider the pandemic’s longer-term implications, they are likely to look harder at their exposure to sovereign debt and the solvency of indebted governments. This further increases the attractiveness of gold, which, even if it produces no income and is costly to store, carries no credit risk.”
USAGOLD note: Lombard Odier, founded in 1796, is a private Swiss banking firm that manages about $250 billion in assets for private individuals and other institutions. It is now recommending gold ownership to its clientele.