Jupiter multi-manager Peter Lawery says gold could end up becoming its own asset class with its own sector.
Jupiter’s multi-manager team is well known for holding gold through a physical ETF and Lawery says there are no plans to cut its holding, saying gold will not mature until it reaches asset class status. He says: “At the moment, it is lumped in with commodities. You are starting to see energy and commodities separate into asset classes and gold may be the third. It could end up with its own sector.”
Lawery says the three characteristics of a bubble are overvaluation, over-ownership and hype. He says: “Negative real interest rates often support gold so we cannot say it is overvalued. Not much of the investing public owns gold and the central banks were net sellers of gold between 1963 and 2008 before becoming buyers.
“The only problem is hype. We saw Tesco enter the gold market a couple of months ago but it is buying your gold, you cannot go into Tesco and buy gold coins. That tells me the hype is not too bad.”