MID-YEAR OUTLOOK FOR SMSF GOLD INVESTMENTS
According to GoldHub, balancing inflation, political uncertainty, and racket hikes are becoming a challenging environment for gold in the 2nd half of 2022. Hence, if you plan to buy bullion using SMSF, the precious metal in the near term will remain reactive to the actual rates. In turn, it will be driven by the speed of the global central banks as they tighten monetary policies to control inflation.
Yet, according to the GoldHub view, those rate hikes might create some headwinds for the precious metal with the hawkish policy expectations. Nevertheless, they feel that the concurrent continuous inflation with the geopolitical risks will sustain more demand for gold as a safe haven hedge.
Furthermore, they think the underperforming bonds and stocks in a stagflationary environment will be positive for gold. But what does this all mean? Well, if you want to buy or invest in gold bullion in your super fund, it might have a positive outcome.
According to GoldHub, the high rates during 2022 have outweighed inflation risks. Why? The gold prices rallied when Ukraine unfolded, and the investors looked for high quality hedges even with the increased uncertainties.
The gold price once again gained while investors shifted all their attention to monetary policies going higher. So, by May, the gold price responded with a tug of war between the high-risk environments and interest rates.
It also showed in the gold EFT flows and the COMEX net long position. The gold ETF became a substantial investment earlier in the year before giving back gains from May to June. Yet, at the end of June, those ETFs are an inflow year-to-date of US 15.3 billion dollars.
Other keywords were the stronger dollar with higher rates for the gold’s performance and the rising risks of inflation and politics pushing the gold price higher. So, what does this mean looking ahead for all those people interested to buy bullion using SMSF?
The GoldHub feels that investors will keep walking the tightrope facing different challenges in the 2nd half of the year. According to them, monetary policy uncertainty will ramp up volatility. As the majority of banks are expected to lift the policy rate more.
Hence, it leads to strain on the financial market, including gold. So, investors keep facing difficult choices regarding their asset allocations. But, according to them, while gold remains to lag during most reflationary periods, it still outperforms these pullbacks.
Thus, while the spot gold price is not moving in a higher direction, it will depend on what factors tip the scale. So, according to the gold research specialist, they believe that gold can get two headwinds. The first is a higher interest rate followed by a stronger dollar.
Still, these two drivers might offset other supporting factors, including persistently high inflation where gold catches up to other commodities. Hence, the context of gold will remain relevant for investors during these uncertain times.
So, now is the time to buy gold bullion using your super fund as it remains a hedge and safe haven in these economic times. Make sure to read the full article with charts available here.