Wealthy Asians are advised to buy more gold

Wealthy individuals in Asia are again being advised to buy gold more often, according to a survey by financial service provider INTL FCStone among 174 different banks, advisors and asset managers. In their latest report 'Going For GoldWe read that 62% of respondents advise their wealthy clients to buy (more) gold, because the price is currently relatively low and they consider the economic, financial and geopolitical situation to be favorable at the moment.

Not only do many asset managers, banks and advisors believe that high-net-worth individuals should include gold in their portfolios, they also believe that a larger percentage in bullion is currently warranted. Previously, they advised clients to invest 3 to 5 percent of their assets in precious metals, but now it is 5 to 10 percent.

Growing middle class in China

The increased interest in gold in Asian countries should not go unnoticed, because China and India are by far the most important markets for the precious metal. In these countries, gold is more often seen as an alternative form of savings and less as a speculative investment. Add to that the growing middle class in China and you have an important market for precious metals.

According to the fifth China Private Wealth Report by Bain & Company and China Merchant Banks, the number of Chinese with assets of at least 10 million yuan ($1.5 million) rose from 180,000 to 1.6 million between 2006 and 2016. This means that the potential target group for the precious metal is constantly expanding.

"Gold has fallen a bit in recent months due to the rise in interest rates in the United States, so there is now a better opportunity to buy. For clients who do not have precious metals in their portfolio, now is the time to expand their position," Chris Land of Holborn assets told the South China Morning Post. He advises his clients to hold ten percent of their assets in precious metals.

This contribution was made from Geotrendlines