Amundi: Gold will remain a reliable financial refuge in 2020
Gold will continue to be considered as a powerful protection against geopolitical risks, experts say investment companies Amundi Asset Management.
Gold gained from abrupt changes in the monetary policy of Central banks during 2019. The growth of prices for gold was caused by economic uncertainty, rising geopolitical tensions and a sharp decline in expectations for real rates in the United States.
"We remain constructive on gold in 2020, as we believe that all three of these factors will also underpin the precious metals," write the experts.
Active management of balance sheets by Central banks, of course, is another important factor and is likely to play the same role as in 2010-2011. The scenario of risk of gold is associated with the recovery of economic growth in the case of stabilization or recovery in world production. In addition, the business transaction and short-term weakening of sentiment risk can reduce the appetite for assets shelters. On the other hand, economic growth is not strong enough to stimulate the weak physical demand for the yellow metal.
"If, as we believe the global recession will be averted, the Outlook for commodities remains favourable. Gold will continue to be considered as a powerful protection against geopolitical risks", — summed up in the company.