Kleinwort Benson’s CIO Mouhammed Choukeir has dropped gold after holding the precious metal for several years, citing its break below the US$1,500 per ounce mark as the main motivator, and is increasing allocation to the US dollar.
Choukeir said Kleinwort Benson held gold in portfolios due to its "defensive characteristics in times of financial stress and because its sensitivity to inflation is better than most other asset classes", but with momentum moving towards the negative, the commodity seems like an "increasingly expensive form of insurance".
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"We will re-evaluate gold’s defensive and diversification attributes once positive momentum is re-established," Choukeir added, calling the US dollar a "safe haven currency which has positive momentum".
Choukeir said, "The US dollar has strong defensive characteristics in periods of market stress. Equity markets are at our close to all-time highs in many regions, but there are signs of investor complacency."
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