Gold has long been considered as a wealth preservation asset that is particularly good to have in hard economic times. Gold one again got some interest from women of the world’s richest people. Earlier this year, gold traders were shaken by the investment decision of one very rich man who decided to put half his personal wealth in gold.
Egyptian billionaire Naguib Sawiris, the second richest man in the country, made international headlines by investing half of his $5.7 billion portfolio into gold. That means that he invested almost $3 billion in gold! This works out to about 2 million ounces of gold or 62 metric tons! That is why the market was shaken. This would make Sawiris the 45th largest holder of gold which is more gold than what Argentina, Bolivia, Belarus and Finland have. And they happen to be entire countries whilst he is just one man.
Investment advisers often have a dim view of gold. What most advisers do is to push clients to buy more stocks, bonds, CFDs and other financial investments. Gold often makes up between 3-5% of most good investment portfolios. Billionaires like Warren Buffet might not have had flattering to say about gold but things seems to be changing.
Sawiris is not the only billionaire who has made significant investments in the yellow metal. Since 2016, some powerful financial figures have come out strong in support of gold.
Legendary investor George Soros recently moved a sizeable chunk of his money in gold by acquiring a stake worth $264 million in gold producer, Barrick Gold. According to Soros believes a full on trade war is inevitable. And that it would cause massive deflationary pressures globally.
Fellow billionaire investor Stanley Druckenmiller decided to do the unconventional by putting a lot of money in gold. It should be the logical decision but not for most billionaire investors share the sentiment or they are being slow to react. Perhaps billionaires like Sawiris looked back at 2008 financial crisis and how their gold versus fared in comparison to their gold investments. In fact, investors who moved more than a third of their assets into gold before the crisis would have increased the value of their investment portfolios by as much as 60%.
In 2016, Lord Jacob Rothschild announced changes to his portfolio for it to have a higher percentage of gold stock. He noted had reservations about the impact of low interest rated in the country, the negative yield in the stock market and the quantitative easing. He believes that the monetary policies has changed especially now with the Trump administration. He together with David Einhorn believe that the US is heading for extremely large high rates of inflation. In February 2017, Einhorn shorted sovereigns and switched to gold.
Clearly, there is a lot more we are not seeing. Gold may seem a little slow on the uptake. At the rate that people are buying gold right now, it is clearly not the highest it is ever going to be. This wealthy people are bracing themselves for something big. Small gold owners like your typical coin or gold jewellery collector might want to hold on to their gold for a little while longer. According to Michael CEO from Melbourne Gold Company, Melbourne Gold Company currently can’t get enough gold to meet demand. Is this a sign of things to come?