FX.co ★ Investors should turn their attention to gold

Well-known investor Denis Hartman said it is time for investors to turn their attention to gold as stock markets seem to be shifting to bearish. In a recent note, he highlighted how the yellow metal helps protect university investments, urging other members of the University of Akron's investment committee to reduce exposure to equities and invest in gold. He added that the attitude towards gold should be reasonable since this precious metal works as an insurance against inflation and the weakening of the stock market.

Hartman also mentioned that since the fund's rotation, gold's position has increased by 5.5%, while the Russell 2000 stock index has fallen by more than 7%. And now, the S&P 500 has already lost 10%, and there is a high probability that this will continue in the following days.

Hartmann currently owns 43.8% of cash, 6.7% of gold and 50.5% of blue chip stocks. He said he is categorical about cryptocurrencies.

Managing director and chief economist of CME Group Bluford Putnam is also optimistic about industrial metals. He said gold and precious metals have upside potential, but an economic downturn in China could lead to lower demand until the end of 2022. Also, for prices to rise sustainably, inflationary expectations must be lifted.

Short-term inflation expectations may continue to rise as the Federal Reserve plans to tighten interest rates throughout the year. Nevertheless, gold will remain as a good support because interest rates will remain relatively low despite market expectations of aggressive actions by the Fed this year.