Daigo Genji, an independent multi asset advisory firm that offers state of the art trading technology coupled with 24-hour execution and clearing on major commodities exchanges, today announced that it has released its Gold Market Outlook.

The gold market outlook shows how the combination of high risk, low opportunity cost and positive price momentum looks set to fortify gold investment and neutralize weakness in consumption from an economic contraction. There are a few important reasons to believe that the gold price will continue to move higher in the second half of 2020, reaching a fresh record high for the precious metal in the coming twelve months.

Investors have again switched their attention to gold in 2020, as to a key portfolio hedging strategy. Looking forward, expectations for a faster recovery from COVID-19 are heading more and more towards a slower recovery or potential difficulties from additional waves of infections. Regardless of the recovery pace, the pandemic will most likely have a lasting effect on asset allocation. It will also continue to reinforce the role of gold as a strategic asset for investors’ portfolios.

Gold had a fantastic performance so far, increasing by more than 25% in US-dollar terms and remarkably outperforming all other major asset classes. In August, gold has reached an all-time high crossing the level of 2,000$/oz and gold prices reached record highs in all other major currencies.

Gold benefited from investors’ necessity to reduce risk, with the recognition of gold as a hedge further underscored by the record inflows seen in gold-backed ETFs.

Global equities for the last ten years were on a continuous and consistent one-way trend. The COVID-19 pandemic changed that trend, resulting in a significant pullback, with all major equity indices dropping by more than 30% during the first quarter.

As these dynamics heighten risk and lead to the possibility of even lower returns than expected, Daigo Genji believes that gold can play an increasingly relevant role in investors’ portfolios knowing that gold’s effectiveness as a hedge may help mitigate risks associated with equity volatility.

The COVID-19 pandemic is having a devastating impact on the global economy, therefore, the IMF is projecting a 4.9% contraction in global growth in 2020, with increasing levels of unemployment and wealth destruction.

“For all investors, this situation is not only keeping uncertainty factor at very high levels, but it may also have a long-lasting consequence on their portfolio performance. Against this backdrop, we at Daigo Genji are convinced that gold can be an extremely valuable asset: it can help investors diversify risks and it will definitely contribute positively to improving risk-adjusted returns,” said Mr. Izumi M. Kunie, Daigo Genji CEO.

About Daigo Genji
Daigo Genji is an independent multi asset advisory firm that offers state of the art trading technology coupled with 24-hour execution and clearing on major commodities and multi asset exchanges throughout the Asia Pacific Region. Daigo Genji is providing a full range of trading services to commercial, institutional and individual customers. Daigo Genji is a privately held company with directors that forged their expertise in the commodity markets in the last 30 years and that remain committed to the continued growth of the company and the leadership within the industry.

https://daigo-genji.com/