David Darst, Morgan Stanley Wealth Management Chief Investment Strategist, on what's next for gold.
Fed policy is one of the many factors currently affecting gold but what about the long-term?
The market now believes there’s at least a chance the Federal Reserve Bank may taper its $85 billion per month bond buying spree and interest rates are at 2.5%, up almost 120 basis points from their May lows. With less money in the economy, there’s a perceived lower need for an inflation hedge such as gold.
But while gold may have fallen – and can possibly fall even more – there is still a justification for holding at least some of your assets in bullion. That’s what David Darst, Morgan Stanley Wealth Management Chief Investment Strategist, said in his most recent note on the topic. One of the many reasons included:
“Gold may be viewed as a portfolio-diversifying asset, characterized by generally low correlations of returns with global equities and many other risk asset classes, including high grade and high yield bonds, master limited partnerships and real estate investment trusts.”
Though up 6% since the start of July, gold is down 5% since May and 23% overall this year. So, what does Darst think investors should do with the precious metal now?
Watch the video above to get Darst’s insight on gold and the asset management.