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August 9, 2012updated 04 Apr 2017 3:36pm

Stonehage urges caution over gold investments

UK-based multi-family office Stonehage Group has warned investors in gold suggesting they take a neutral stance in investing in the overvalued metal. Stonehage said that investors were paying exceedingly high prices to protect themselves against inflation and the Eurozone crisis by investing in gold. Stonehage said that the price of gold being dependent on investment demand puts it in a precarious position.

By Lizabeth Davis

UK-based multi-family office Stonehage Group has warned investors in gold suggesting they take a neutral stance in investing in the overvalued metal.

Stonehage said that investors were paying exceedingly high prices to protect themselves against inflation and the Eurozone crisis by investing in gold.

Stonehage said that the price of gold being dependent on investment demand puts it in a precarious position.

Ronnie Armist, executive director at Stonehage, said: “Should investors fall out of love with it, the growing stockpiles of gold held in vaults and ETFs may hit the market, placing downward pressure on prices.”

He said that investors should not rely on gold when markets are unstable.

 

Price of gold may be hit

The group’s investment advisory division, Stonehage Investment Partners (SIP), said that if inflation does not surface soon, gold prices will be considerably affected.

Stonehage also warned that if investors continue to buy substantial amounts of gold, the price of the metal could triple. The group said this could happen if all global investors increase gold allocations by just 1%.

 

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