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Wealth experts see little shine left in gold
REUTERS, Nov 6, 2010, 03.06am
NEW YORK: After a year of record demand, gold is getting tepid reviews from top US wealth managers who say it is no longer the safe haven it was at the peak of the financial crisis. As investors soured on stocks and bonds and worried that government stimulus spending would fuel inflation, they queued in scores to stock up on gold. Whether physical bullion or derivatives, gold was deemed safe and the closest alternative to sticking cash under the mattress.
Money managers to the rich, though, warned that by now there is tremendous risks lurking behind gold's shine. "That play has already passed by,' said Lawrence Hughes , chief executive of BNY Mellon Wealth Management, speaking at the Reuters Wealth Management Summit on Wednesday. Investors "need to be careful not to do what people do in line at the grocery store: always jump to the fastest-moving line or, in this case, to the hot-performing category," he said.
"Gold has flown up in price," said Gordon Fowler, chief executive and chief investment officer for Glenmede, a Philadelphia-based wealth manager for the very wealthy. "Inflation would have to go up 90% in this country for those two numbers to get back in line," he said. Now that many central banks have stopped selling and started buying gold, soaring demand in Europe, Turkey and India has been driving the gold rush. That has sparked worries that a gold bubble is forming.
REUTERS, Nov 6, 2010, 03.06am
NEW YORK: After a year of record demand, gold is getting tepid reviews from top US wealth managers who say it is no longer the safe haven it was at the peak of the financial crisis. As investors soured on stocks and bonds and worried that government stimulus spending would fuel inflation, they queued in scores to stock up on gold. Whether physical bullion or derivatives, gold was deemed safe and the closest alternative to sticking cash under the mattress.
Money managers to the rich, though, warned that by now there is tremendous risks lurking behind gold's shine. "That play has already passed by,' said Lawrence Hughes , chief executive of BNY Mellon Wealth Management, speaking at the Reuters Wealth Management Summit on Wednesday. Investors "need to be careful not to do what people do in line at the grocery store: always jump to the fastest-moving line or, in this case, to the hot-performing category," he said.
"Gold has flown up in price," said Gordon Fowler, chief executive and chief investment officer for Glenmede, a Philadelphia-based wealth manager for the very wealthy. "Inflation would have to go up 90% in this country for those two numbers to get back in line," he said. Now that many central banks have stopped selling and started buying gold, soaring demand in Europe, Turkey and India has been driving the gold rush. That has sparked worries that a gold bubble is forming.
