Is gold still an attractive investment channel?

According to experts, several macroeconomic factors are supporting the upward trend in gold prices. However, this is not the only investment channel benefiting in the new market environment.

“Gold remains a promising investment channel. This asset class can withstand potential risks in the coming period, especially as major economies continue to show signs of slowing down due to reduced consumer spending and rising unemployment,” said Trinh Ha, market strategy expert at Exness Investment Bank, at the “Finding Investment Opportunities in the Second Half of the Year” seminar organized by Investment Newspaper.

Mr. Trinh Ha is confident in the growth potential of gold in the second half of this year. Photo: Dau Tu Newspaper.

Moreover, gold is expected to remain a hot commodity due to continuous purchases by major central banks. In a report published by the World Gold Council (WGC) in June 2024, 29% of the 69 central banks surveyed indicated their intention to increase gold reserves in the next 12 months. This is a record high since the WGC began its survey in 2018.

Furthermore, the BRICS bloc also has a primary interest in gold. According to the WGC, it has been the largest buyer of gold since 2022, and China is currently the most active member country in purchasing gold reserves.

“Furthermore, the trend of interest rate cuts by major central banks will cause the US dollar to depreciate. This will open up favorable opportunities for investing in gold,” Mr. Trinh Ha added. Currently, financial institutions are forecasting that the US Federal Reserve (Fed) will lower interest rates 2-3 times this year. Europe and the United Kingdom will also take similar actions towards the end of the year.

Besides investing in gold, the expert from Exness Investment Bank suggests that investors can also consider the cryptocurrency market. This investment channel shares some characteristics with gold, such as limited and decreasing supply. In the future, this will be a promising area, as several major markets such as the US, Canada, and Australia have already allowed cryptocurrency trading.

“If major economies succeed in a ‘soft landing,’ capital will flow to higher-risk investment assets. For example, in the stock market, investors can choose shares of companies operating in highly cyclical sectors and using high operating leverage. Because as revenue increases, companies with high leverage will see profits increase rapidly. Small-cap stocks also fall into a similar category,” Mr. Trinh Ha suggested.

Furthermore, this expert noted that short-term interest rates are currently favorable, and money continues to flow into short-term bonds to benefit from high yields. However, when the Fed decides to lower interest rates, the market will shift towards bonds with safer yields that are higher than current government bond yields.

Source: https://baodautu.vn/vang-lieu-con-la-kenh-dau-tu-hap-dan-d221143.html