BlackRock Says Gold ‘Failing’ as Equity Hedge, Faces Risks – by Ranjeetha Pakiam (Yahoo Finance/Bloomberg – March 11, 2021)

https://finance.yahoo.com/

(Bloomberg) — Global money manager BlackRock Inc. just delivered a double-barreled warning on the merits of holding traditional haven gold right now.

Bullion is proving to be a less effective hedge against moves in other assets, such as stocks, as well as inflation, according to Russ Koesterich, portfolio manager for BlackRock’s Global Allocation Fund. Moreover, gold faces headwinds should the recovery pick up pace, he warned in a blog post.

Gold is “failing as an equity hedge,” Koesterich said, noting its positive relationship with risky assets was even stronger when compared with tech stocks.

He added: “Gold’s ability to hedge against inflation has been somewhat exaggerated. While it is a reasonable store of value over the very long-term — think centuries — it is less reliable across most investment horizons.”

Bullion has lost ground in 2021 as the recovery from the pandemic gains more traction and Treasury yields surge, although the haven has made a partial comeback this week.

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