30
Mar
2016

“Inflation Linked Bonds and Gold As Diversifiers” Favoured By World’s Largest Asset Manager

BlackRock Inc. have joined Pacific Investment Management Co. (PIMCO) in recommending inflation linked bonds and gold, warning costs are poised to pick up and there is a growing risk of inflation.

“We like inflation-linked bonds and gold as diversifiers” said New York-based BlackRock which is the world’s largest asset manager, managing $4.6 trillion, reported Bloomberg.

BlackRock

“Stabilizing oil prices and a tighter labor market could contribute to rising actual, and expected, U.S. inflation,” Richard Turnill, BlackRock’s global chief investment strategist, wrote Monday on the company’s website.

“If you look at inflation expectations as they are reflected in the bond market we think they are too low,” Joachim Fels, global economic adviser for Pimco said in an interview on Bloomberg Television. “We still think markets are pricing in too low a profile for inflation. We don’t think inflation will move significantly above central bank’s targets, but we think that there’s a good chance that over the next 12 months or so, particularly in the U.S., that we will get back to 2 percent.”

“We like Treasury Inflation Protected Securities,” Pimco’s Worah said in a video on the company’s website this month. “The market is pricing 1 percent inflation in the U.S. for next year. We think it’s likely to be closer to 2 percent.”

“We may well at present be seeing the first stirrings of an increase in the inflation rate — something that we would like to happen,” Stanley Fischer, vice chairman of the Fed Board of Governors, said this month.

PIMCO already recommend owning gold as part of diversified portfolios. In 2013 they introduced a ‘Multi Real Asset Strategy’ specifically created to tackle “inflation risk”.

“The strategy tactically invests in multiple inflation-sensitive asset classes, allocating across a broad opportunity set of real assets, including global inflation-linked bonds, commodities, real estate, currencies and gold …  Gold has characteristics of both a commodity that is easily stored for a long period of time and a currency whose supply is limited.”

Gold Prices (LBMA)
30 Mar: USD 1,238.20, EUR 1,094.12 and GBP 860.23 per ounce
29 Mar: USD 1,216.45, EUR 1,087.71 and GBP 853.04 per ounce
24 Mar: USD 1,216.45, EUR 1,088.75 and GBP 861.89 per ounce
23 Mar: USD 1,232.20, EUR 1,101.76 and GBP 870.03 per ounce
22 Mar: USD 1,251.80, EUR 1,117.35 and GBP 876.96 per ounce

Silver Prices (LBMA)
30 Mar: USD , EUR and GBP per ounce (Released at 1200 GMT)
29 Mar: USD 15.06, EUR 13.44 and GBP 10.56 per ounce
24 Mar: USD 15.28, EUR 13.70 and GBP 10.82 per ounce
23 Mar: USD 15.58, EUR 13.92 and GBP 10.99 per ounce
22 Mar: USD 15.89, EUR 14.16 and GBP 11.12 per ounce

Gold News and Commentary

Gold Bulls Cheer Yellen Caution With More `Easy Money’ Predicted (Bloomberg)

Dovish Yellen, softer dollar support gold near $1,240 (Reuters)

Spot gold jumps after Fed signals cautiousness (Reuters)

Russia becomes world’s top gold buyer (Russia Today)

Russia Adds $6 Billion to Its Gold Reserves in a Week (Sputnik News)

 

Rickards: Why Gold Is Going To $10,000 (Hedgeye)

HSBC: Gold is a highly regarded asset – Audio (Bloomberg)

Ed Butowsky: Calculating The True Cost of Living (Peak Prosperity via Youtube)

Buying gold in 2016 is like buying stocks in 1941 (Marketwatch)

Pensions Timebomb – Europe’s Predicament (WSJ)

Read More Here

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