As the price of gold keeps climbing, now almost 12% YTD on the futures market, and less than 2% away from $3000 per ounce, it’s interesting to see if the only players that are buying the precious metal are Central Banks and hedge funds or if the trade has gone mainstream. In that regard, State Street has just published a survey where they ask 1500 affluent investors if they own gold and what percentage of their portfolio they have allocated to it. The results are shown in the chart below. 61% of Millenials have gold in their portfolios with an average allocation of 29%. That is a staggering number for an asset that is not easy to understand. The reasons the survey alludes to support this high allocation among millenials, is that the fact they’re affluent at a relative young age, means they’re highly educated and likely understand the implications of high levels of debt and high deficits for the fiat currency system, and see gold as a way to protect their portfolios. X-ers and Boomers have a more typical allocation to gold, around 10%. A final point on the subject is that the U.S. governemt owns 261 million ounces of gold valued at a (book) price of $42.22/oz. That presents an incredible 71X mark to market opportunity. Interesting tailwinds.
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