Millennials are beating baby boomers and Gen X-ers when it comes to investing in gold, according to State Street.
Demand for the precious metal, widely regarded as a safe haven asset, remains strong as recession risks loom.
Gold has rallied almost 9% year-to-date, and is approaching the key $2,000 per ounce mark.
Buying gold isn’t much of a gamble, when it comes to investment strategies.
A safe haven asset, protecting against market downturns and economic uncertainty, it offers stability under pressure in a way riskier alternatives such as stocks don’t. As such, the precious metal is possibly an ideal choice for older, wiser, and more cautious investors – such as those from the baby boomer generation.
Not really, according to the world’s No. 4 asset manager.
Millennials are the biggest investors in gold, beating baby boomers and Gen X-ers by a big margin, according to a report from State Street, which cites the findings of a survey by SPDR ETFs.
“On average, millennials have a higher allocation to gold at 17%, with boomers and Gen X lagging behind at just 10%. And millennials reported a greater appreciation for the convenience of investing in gold through exchange traded funds (ETFs),” George Milling-Stanley, chief gold strategist at State Street, wrote in a report.
“More Millennials than Boomers or Gen X replied that gold ETFs are the best way to invest, with 69% for Millennials, compared with Boomers at 55% and Gen X at 35%,” he added.
Gold prices have climbed almost 9% in 2023 so far – demand for the perceived safety of the yellow metal remains high as economic uncertainties run high, especially with the risk of a recession looming, according to State Street.
As much as 88% of the survey respondents who currently have gold holdings believe the metal is a long-term investment, according to the asset manager. And more than 70% said investing in gold helped improve the performance of their overall portfolios, it added.
“Among investors who hold gold, more than half of all respondents said they expect to increase their gold holdings in the next 6 – 12 months. At 57%, the percentage of investors in gold ETFs who plan to buy more slightly outweighed investors in other gold investments such as bars and coins, gold mining company stocks, gold futures and options, and commodity funds at 53%,” Milling-Stanley wrote.
Gold prices are currently rising toward the key $2,000 level – in reaction to the dollar’s recent weakness and a potential end to the Federal Reserve’s interest-rate increases. Generally, lower interest rates tend to boost gold prices as it makes the metal’s non-yielding properties relatively more attractive.
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