Gold has been a safe haven this year: Time to take profits?

Inflation protection among key benefits to hold metal

Charlie Morris of Atlantic House Fund Management

Charlie Morris of Atlantic House Fund Management

Gold is often seen as a fear trade, but that does not tell the whole story.

You can analyse the price of gold from three aspects. The first reflects the long-term level of historic inflation. Gold is a store of value and compensates for currency debasement over time. The second is the expected level of real interest rates, which explains why the price of gold hugs long-dated inflation-linked bonds. The third is the premium-to-fair value which reflects the market hype. Going for gold: Multi-asset managers look beyond 'core assets' ahead of 'volatile' Q4 The latter points are the ones we will explore. Over the past year, we have seen US 20-year real rates...

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