Gold News

Gold investment appealing for 'portfolio diversity'

A leading figure at New Star Investment Fund has claimed today (November 17th) gold will continue to remain popular with investors due to a number of fundamental factors.

Mark Harris, an employee at the fund, which has around £16.2 billion under its management, has explained that the yellow metal is particularly appealing as a portfolio diversifier.

Furthermore, he stated that gold buying will continue in the coming months as supply is constrained, citing a four per cent year-on-year slide in global output during the second quarter.

He said: "There is no credit or default risk associated with gold and, whatever else happens, an investor in gold is left with a physical asset rather than a piece of paper.

"It is this stability and lack of correlation with other asset classes that has led to the increasing popularity of gold as a portfolio diversifier, both for institutional and retail investors."

The view that the current financial malaise is spurring gold investment has also been forwarded by Darren Heathcote, head of trading at Investec Bank, the second-largest manager in South Africa.

"I don't think we're out of the woods yet. There's still potential for problems in the financial system and a lot of systemic risk to be ironed out," he said.

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