Analysis
Gold still needs to be at the top of the list for investors – CRU
Gold prices have pushed to their highest levels since 2011 but sentiment isn ’t going to change and its still the investment that should be at the top of everyone ’s list, according to Paul Robinson, managing director at CRU.
In an interview with Kitco News, Robinson said that the factors that have driven gold prices to its current levels — unprecedented monetary policy, global economic uncertainty, geopolitical tensions — have not disappears and these will continue to support prices for the rest of the year.
“There is more uncertainty now as to where the global economy goes over the next 12 months,” he said. “And there’s actually an even stronger reason to have gold as a hedge and your portfolio.”
Robinson said that the COVID-19 pandemic continues to impact economic expectations and it will probably take until the end of the year to get a clear picture on the long-term health of the global economy. He added that CRU expects the global economy to contract by 5% in 2020.
Not only is Robison bullish on precious metals, he also sees opportunities for mining equities. Coming out of the COVID-19 lockdowns, he said that some companies are in pretty good shape, seeing improved cashflow after cleaning up their balance sheets.
He added that investors are paying more attention to miners because of the value and growth potential.
“There’s a huge opportunity for metals and mining from junior mining all the way up to the miners in the world, because we’ve never been in a position where some of those investment peer markets are so weak on a relative basis,” he said. “Now, would you invest in automotive at the moment? Would you invest in retail space, commercial property? In high street fashion?”
Looking ahead, Robinson said that miners have to show that they won ’t take their new found value for granted.
“We still have a reputation of sort of burying money in the ground that never comes out again, so I think there needs to be some caution there,” he said.
When it comes to evaluating the commodity space, Robison said that he continues to see the most potential for precious metals; his firm is neutral on base metals like copper and he is bearish on oil prices.
