As recession fears rise, Bernstein can be suggesting investors look to gold as well as also gold mining stocks to reduce risk.
The firm’s global quantitative trading strategy group on Monday sent a note titled “a strong case for holding gold.”
“We show in which via current equity valuations as well as also via similar points in previous cycles gold as well as also equities give more similar returns … [to] risk assets such as equities,” Bernstein said.
“A material shift in geopolitical risk as well as also a near-record build up in government debt make additional potential risk-free assets more questionable as well as also also bring a temptation to create inflation, thereby further enhancing the case for gold,” the note added.
Bernstein can be tracking two key measures, both of which are at levels not seen since World War II: global government debt as well as also central bank buying of gold. The former “creates a temptation to manufacture inflation,” Bernstein said. The latter can be a “trend in which can be likely to continue for as long as the US share of global GDP continues to decline,” the firm said.