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12 November 2021

Gold

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Story of the day

The US dollar recovered in 2021 and its safe haven status remains intact. However, a decline in the dollar's strength could see a strong reversal rally in gold. To hedge for this scenario, we retain our Overweight on gold.

The DBS Chief Investment Office believes gold will continue to be supported with strong diversified demand from central banks around the world, while yields stay widely negative in light of elevated inflation.

Overweight on gold in 4Q21

What does this mean for your portfolio?

At current prices, gold is attractive to long-term buyers looking to hedge their portfolio against risks from dollar weakness, negative interest rates, and risk events.

Gold miners, in particular, is a sector to look out for. With gold prices still well above all-in-sustaining costs, gold miners' profitability will rise with each ounce of gold produced, and the risk-reward remains favourable.

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We like these:

Gold ETFs

We continue to favour SPDR Gold Shares and iShares Gold Trust for direct exposures to the precious metal.

These gold ETFs are cheaper alternatives to physical gold and are good portfolio diversifiers in times of uncertainty.

Gold Miners ETF

VanEck Vectors Gold Miners ETF is our pick to track gold miners. Production for gold miners is expected to recover from the Covid lockdown. We believe the risk-reward is favourable to stay invested in this sector.

We believe the risk-reward is favourable to stay invested in this sector.

Jupiter Gold & Silver Fund

The Jupiter Gold & Silver fund seeks returns from the gold and silver market through dynamic asset allocation between equities and bullions. Equity exposure ranges from 50% to 85%, while precious bullion exposure ranges from 15% to 50%. The split between Gold and Silver is also dynamic.

If you are interested to find out more, please contact your RM.

*For Accredited Investors only

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