Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day’s top stories directly to your inbox. Sign up here!

(Kitco News)

There is rising demand for gold as banking turmoil intensifies and investors look for a hedge against a “catastrophic scenario,” JPMorgan said in a note.

“The U.S. banking crisis has increased the demand for gold as a proxy for lower real rates as well as a hedge against a ‘catastrophic scenario,'” JPMorgan strategists wrote.

Another 2023 favorite is the technology sector, they added.

JPMorgan described this strategy as the “long duration” trade, stating that it is growing in popularity. The trade means being overweight on gold, technology growth stocks, and shorting USD.

The “long duration” trade is now a theme in May. And it is “relatively attractive.” In the case of a deep U.S. recession, its upside is exponential. And in the case of a mild U.S. recession, its downside risk is limited, the firm said.

JPMorgan also noted that while institutional investors are quickly getting into gold, retail investors are opting for Bitcoin.

The note cited the regulatory crackdown as the reason that deters “institutional investors from engaging with crypto.”

Investors are also choosing to short the U.S. dollar “given the strong negative correlation between U.S. bonds and DXY performance,” the strategists added.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Read the full article here


Comments are closed.