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Yahoo
09-07-2025
- Business
- Yahoo
Why It Makes Sense to Keep Holding Gold ETFs?
Investor sentiment remained fragile in the first half of 2025, providing strong tailwinds for gold. Despite gradually easing geopolitical tensions, the Trump administration's chaotic tariff policies, weakening greenback and central banks' increasing purchases of the precious metal have contributed to gold's sustained appeal. Favorable fundamentals could position gold for further gains through late 2025 and into 2026. In such a scenario, increasing exposure to gold remains a smart strategy. Investors should not be discouraged by any likely decline in gold prices. Rather, they should adopt a "buy-the-dip" strategy. Given the increasing macroeconomic uncertainty and geopolitical volatility, gold remains an essential hedge for all investors, regardless of their investment theme. Here's why gold ETFs remain a compelling choice for investors. Expectations by some economists that inflation may worsen before easing toward the Fed's target have kept investor interest in the yellow metal elevated. According to Investopedia, a growing number of analysts anticipate a surge in inflation during the second half of 2025, as importers begin passing President Trump's tariff-related costs through the supply chain and ultimately to consumers. Across extended investment periods, gold preserves its purchasing power, outpacing inflation and diversifying an investment portfolio due to its historical tendency to have a negative correlation with other asset classes. The greenback has been losing its strength and trading near multi-year lows, marking its worst first-half performance since the 1970s, with both technical and fundamental factors working against the currency. Per Trading View, U.S. Dollar Index (DXY) has fallen about 10.36% over the past six months and around 1.34% over the past month. Gold prices are inversely related to the value of the U.S. dollar, and the greenback's struggles in 2025 have been a tailwind for the yellow metal. A weaker U.S. dollar generally leads to higher demand for gold, pushing its price upward as it becomes more affordable for buyers holding other currencies. The yellow metal gains additional support from expectations of rate cuts by the Fed. The greenback's value tends to move inversely with interest rate adjustments by the Fed. Interest rate cuts by the Fed make the dollar less attractive to foreign investors, as this weakens the U.S. dollar. Per the CME FedWatch tool, markets are anticipating a 69.4% likelihood of a rate cut in September and an 89% likelihood of a rate cut in October. Goldman Sachs now anticipates three quarter-point rate cuts this year, up from just one cut, per the previous expectation, citing softening labor market trends and limited inflationary impact from tariffs, as quoted on Reuters. According to the World Gold Council (WGC), in May, central banks added a net 20 tons to global gold reserves, an increase from the previous month, though the overall pace of accumulation has slightly eased. Sustained central bank buying could drive gold prices up. Per the Official Monetary and Financial Institutions Forum (OMFIF) Global Public Investor 2025, as quoted on WGC, 32% of central banks plan to increase their gold holdings over the next one to two years. Even with stabilizing geopolitical conditions in the Middle East, the only word that can be used to describe the geopolitical landscape in 2025 is 'complicated.' Amid the current economic and geopolitical climate, adopting a long-term passive investment strategy becomes the go-to approach for investors to weather short-term market storms. Concerns over U.S. debt levels can add pressure to investor confidence, making investors risk-averse and increasing demand for safe-haven assets. President Trump's tax-cut and spending bill was passed by Congress last week, reigniting the United States' mounting long-term debt risks. According to BBC, the tax-slashing bill is projected to add at least $3 trillion to the already staggering $37 trillion U.S. debt load. Per Reuters, lawmakers raised the U.S. government's borrowing limit by an additional $5 trillion. Investors can enhance their exposure to the precious metal to potentially boost portfolio gains and better prepare for an uncertain market environment going forward. Increasing exposure to the yellow metal stands out as a smart play than attempting to time the market, an approach that many investors may be tempted to employ. Investors can consider SPDR Gold Shares GLD, iShares Gold Trust IAU, SPDR Gold MiniShares Trust GLDM, abrdn Physical Gold Shares ETF SGOL and Goldman Sachs Physical Gold ETF AAAU to increase their exposure to the yellow metal. Each fund has a Zacks ETF Rank #3 (Hold). With a one-month average trading volume of about 9.49 million shares, GLD is the most liquid option, ideal for active trading strategies. However, implementing an active strategy in the current landscape may not be the most effective approach. GLD has also gathered an asset base of $102 billion, the largest among the other options. Performance across all funds has remained largely consistent. The funds have gained about 15.6% over the past three months and about 39% over the past year. Regarding annual fees, GLDM is the cheapest option, charging 0.10%, which makes it more suitable for long-term investing. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR Gold Shares (GLD): ETF Research Reports iShares Gold Trust (IAU): ETF Research Reports abrdn Physical Gold Shares ETF (SGOL): ETF Research Reports SPDR Gold MiniShares Trust (GLDM): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The National
02-07-2025
- Business
- The National
Why gold and Bitcoin can coexist in an investment portfolio
At first glance, gold and Bitcoin could not appear more different. Gold is a natural asset that has earned its reputation as a haven and store of value over thousands of years. It has even experienced a renaissance in recent years as a sought-after central bank reserve. Bitcoin, by contrast, is a digital creation – a technical asset that emerged in the aftermath of the global financial crisis, born in an era when trust in traditional financial institutions was at an ebb. While gold's legitimacy is deeply rooted in history, Bitcoin's value proposition stems from innovation. Its ambition is to become a sound form of money – and it is here that its similarities with gold begin to surface. Like gold, it is mined, has a capped supply and is not issued by any central authority. Yet, its relatively short and volatile history makes it a more complex addition to traditional investment portfolios. The strong performance of both gold and Bitcoin last year has led to a new debate over which is the better hedge. Gold climbed about 25 per cent. Bitcoin more than doubled, breaking past $100,000, and is staying above that mark for now. For many investors, especially in the Middle East, the bigger question is how these assets fit into a portfolio designed to manage risk and capture long-term value. Investors need not view gold and Bitcoin as mutually exclusive choices. In fact, both assets can coexist within a portfolio, each serving a distinct purpose. While a sizeable allocation to Bitcoin, such as 10 per cent, may not be appropriate for most investors, having 1 per cent is not a bad idea. It gives them the smell test, or the taste test, if you like. That small allocation is not a speculative bet. It is part of a thoughtful and measured approach to help investors prepare for a possible long-term shift in the global monetary system. Bitcoin is still not a mainstream asset class, but it is getting harder to ignore. Taking a five-year view, it has delivered returns no other asset class has over the same time frame. I often describe Bitcoin as the digital equivalent of gold. And investor demand is growing, particularly among those who are looking for assets outside the traditional system. But it is also volatile. If you are trying to de-risk your portfolio from a volatility point of view, you are better off with gold than with Bitcoin. Structured solutions that combine Bitcoin with other asset classes have emerged as one way to gain exposure while managing risk and maintaining alignment with evolving regulatory requirements. We are seeing rising interest from investors in 'out-of-system' assets, ie assets that are not tied to central banks or fiat currency structures. While gold has long filled this role, Bitcoin is emerging as a digital alternative, particularly appealing to younger and less constrained investors. As this shift continues, it is probable that Bitcoin will begin encroaching on gold's traditional appeal. This may well represent the next evolution in investor behaviour. This perspective is supported by our research, which demonstrates that both gold and Bitcoin can act as hedges against systemic financial risks, inflation and even de-dollarisation. However, the analysis also highlights a critical distinction: Bitcoin still behaves like a risk-on asset. It tends to fall when equity markets correct, whereas gold often holds its ground. That is an important consideration when thinking about how much and in what way to include either in a portfolio. Looking ahead, I strongly believe regulation will be a crucial factor. And here too, we are seeing progress. The questions now are, how do we audit this asset class and how do we ensure it meets anti-money laundering requirements? And we are seeing those issues being worked on in key financial centres. Bitcoin is already halfway down the path to broader adoption. But for it to truly go mainstream, it needs to be as easy as tapping a credit card in a store. And, that level of integration will undoubtedly take time. So, for investors in the UAE and across the region, this is not about choosing sides, but about preparation. Gold remains the core stabiliser. But Bitcoin, handled carefully and with the right structure, has a role to play as well.
Zawya
25-06-2025
- Business
- Zawya
Franklin Templeton organises inaugural Reserve Management Summit
RELATED TOPICS UAE RELATED COMPANIES Franklin Rsc Franklin Rsc Dubai Fincl Official Institutions managing over $7.3 trillion in assets cite dislocations in the U.S. Treasury market and trade war as long-term key risks for markets Dubai - Franklin Templeton hosted its inaugural Reserve Management Summit (the Summit) in London which brought together central bank policymakers and reserve managers representing over $7.3 trillion in sovereign assets, to discuss key topics and exchange views on the global economy. At the Summit, Franklin Templeton Institute surveyed these reserve managers and central bank representatives to gather insights on the key challenges, risks, and strategic priorities shaping reserve management in the years ahead. The survey captured responses on macroeconomic expectations, asset allocation shifts, and future-looking investment trends. Below are selected highlights: Top Challenges and Macro Views 53% of participants cited dampening portfolio volatility as the single largest challenge facing reserve managers in 2025, followed by achieving return objectives (27%) and liquidity management (20%). On interest rate expectations, 38% each expect the U.S. 10-year Treasury yield to remain between 4.50% and 5.00% and 4.00% and 4.50% by year-end, while 15% foresee yields rising above 5.00%. Strategic Allocation Shifts Gold was seen as the asset class most likely to increase in strategic allocation over the next three years (31%), followed by global equities (23%). Respondents were evenly split across other asset classes, with 15% each pointing to emerging market debt, private credit, and investment-grade credit as areas of growing importance. When asked specifically about credit allocation, 75% of respondents expect to increase allocations to investment-grade corporate credit over the next five years. When asked which emerging market allocation over the next three years, 42% of respondents selected emerging market hard currency debt, highlighting a preference for relatively lower-risk exposure within the asset class. Only 8% expect to increase allocations to either emerging market local currency sovereign debt or emerging market equities, while another 42% indicated none of the above, suggesting a cautious or selective approach to emerging market investments in the near term. Currency Outlook While the U.S. dollar currently holds a 65% share of global reserves, only 50% expect that share to remain within the 60–70% range over the next five years, with 39% anticipating a drop to 50–60% and 11% expecting it to drop below 50%. Long Term Shifts, Innovation & Risks Over the next decade, 53% believe the rise of a multi-polar world of reserve currencies will be the most likely force to revolutionize reserve management practices, followed by digital assets (27%) and the separation of investment and liquidity management functions for reserve managers (20%). Stable coins (46%) and tokenization of private assets (38%) were identified as the most transformative financial innovations over the next decade. The greatest perceived risk to global capital markets through 2030 was split between a potential trade war (40%) and dislocations in the U.S. Treasury market (40%), followed by the loss of the U.S. Dollar as the primary reserve currency (20%). Stephen Dover, Chief Market Strategist and Head of the Franklin Templeton Institute, highlighted the evolving strategies of reserve managers as they seek diversification to mitigate risk. He commented: 'While Treasuries remain their primary holdings, there is a growing interest in expanding into other fixed income assets, equities, alternative currencies, and gold. Additionally, they are exploring the transformative potential of stablecoins and the tokenization of private assets, signalling a shift that could reshape financial strategies for the future.' Sandeep Singh, Head of CEEMEA & India and Co-Head of the Global Official Institutions Group at Franklin Templeton said, 'In an era defined by rapid technological, geopolitical, and economic transformation, no single institution holds all the answers. Our survey reveals a decisive shift among reserve managers toward diversification, innovation, and risk-aware strategies. At Franklin Templeton, our commitment extends far beyond investment products—we are deeply focused on delivering innovation, exceptional client service, and thought leadership that supports the needs of the reserve managers.' Franklin Resources, Inc. [NYSE:BEN] is a global investment management organisation with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton's mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialisation on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and approximately $1.57 trillion in assets under management as of 31 May 2025. The firm established its presence in the region setting up in the UAE in 2000. The office in Dubai is now the hub for Central & Eastern Europe, Middle East and Africa (CEEMEA), supporting retail and institutional investors across the region including some of the world's largest sovereign wealth funds, central banks, family offices and global private banks based locally. Building on this established regional presence, Franklin Templeton further expanded its commitment to the Middle East with the opening of its Riyadh office in March 2024. This press release is intended to be of general interest only and does not constitute professional advice. Franklin Templeton and its management groups have exercised professional care and diligence in the collection and processing of the information in this press release. Franklin Templeton makes no representations or warranties with respect to the accuracy of this document. Franklin Templeton shall not be liable to any user of this report or to any other person or entity for the inaccuracy of information contained in this press release or for any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission. Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes. Please consult your financial advisor before deciding to invest. Issued by Franklin Templeton Investments (ME) Limited, authorized and regulated by the Dubai Financial Services Authority.
Globe and Mail
21-06-2025
- Business
- Globe and Mail
4 Undeniable Factors That Could Push Bitcoin to New All-Time Highs This Summer
Some moments in the market don't need dramatic catalysts; they just quietly build up momentum until something gives. For Bitcoin, (CRYPTO: BTC) the stars are aligning with uncanny precision in ways that are likely to have a stunning result. Four macro forces, each with a history of preceding major rallies in the coin, are once again in play. Here's what's unfolding, and why it might matter more than most investors realize. 1. Surging global liquidity When central banks turn on the liquidity tap and ensure there's more money sloshing around the financial system, that new money generally flows toward riskier assets, such as cryptocurrency, as greater liquidity emboldens investors to take riskier bets. Furthermore, safer asset classes would have already been bid up to the point of being fairly expensive from the perspective of institutional allocators. The global M2 money supply hit roughly $108.4 trillion in April, climbing at a pace last seen right before Bitcoin's 2021 breakout to new highs. The coin's performance tends to lag that liquidity gauge by about one quarter. Liquidity waves eventually peak, but the cash they inject never fully drains from the financial system. If part of that additional base money ends up permanently sequestered in Bitcoin wallets -- as happened after prior monetary easing cycles -- holders will enjoy a higher floor even after central banks commence with new tightening cycles. 2. A weaker dollar When the value of the dollar drops, investors often opt to park their capital in stronger assets that are retaining or increasing in value, like, potentially, Bitcoin. The dollar index is down roughly 10% year to date, its worst six-month slide since 1986. Fund managers are the most underweight to the currency in two decades, per a recent survey conducted by Bank of America. For investors, dollar weakness is more than a near-term tailwind for Bitcoin. A softer greenback often coincides with looser financial conditions abroad, fostering new demand from countries where Bitcoin offers a liquid alternative to depreciating local money. That incremental global bid tends to stick around, because reversing currency weakness usually requires policy shifts that take years to perform. 3. Lower Treasury yields Similar to money supply, interest rates significantly influence Bitcoin's price. As yields on government-backed debt like U.S. Treasury bills drop, and along with it, the cost of borrowing passed on to the financial system, capital needs to flow to riskier assets to secure a return. On that note, benchmark 10-year yields on Treasury bonds have fallen from 4.81% in late January to the low 4% range this week. Every notable Bitcoin surge since 2017 has arrived shortly after real or nominal yields were slipping. That matters for the long haul, because each yield dip trains allocators to view the coin as a portfolio diversifier when bonds offer less income. The habit can persist even after rates rise again, much as gold ownership remained commonplace after real yields recovered in the 1980s. The longer Bitcoin proves able to offset low-yield stretches, the more likely it becomes a fixture in strategic asset mixes rather than a tactical punt. 4. The post-halving supply squeeze Bitcoin's supply situation is also very permissive for the coin to make another run at new all-time highs. The 2024 halving cut miner rewards, decreasing daily issuance to about 450 coins. Demand from institutional investors stemming from their offering of exchange-traded funds (ETFs) holding Bitcoin is running far higher than that flow. Plus, the supply shock math compounds with time. Assuming the price rises even a little, Bitcoin miners will eventually sell even fewer coins to cover their operating costs, and at the same time, new issuance keeps shrinking every four years. That structural throttle on float effectively hands long-term holders an ever-growing share of total outstanding supply, increasing their pricing power, as long as they resist the urge to trade around short-term volatility. The lesson here is that long-term-oriented investors should keep buying Bitcoin, and buckle up, because it has a lot of room to run during this summer and beyond. Should you invest $1,000 in Bitcoin right now? Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Yahoo
19-06-2025
- Business
- Yahoo
Three Rate Cuts in 24 Hours Show Europe's Tariff Challenges
(Bloomberg) -- Three interest-rate cuts in just over 24 hours by central banks in Europe highlighted a shift as monetary officials seek to manage the fallout from Donald Trump's unpredictable trade policies. Security Concerns Hit Some of the World's 'Most Livable Cities' JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown How E-Scooters Conquered (Most of) Europe One Architect's Quest to Save Mumbai's Heritage From Disappearing Central bankers in Switzerland and Sweden had suggested as recently as March that they were most likely done loosening, but the Swiss National Bank instead trimmed borrowing costs by 25 basis points on Thursday, following a similar move by Sweden's Riksbank a day earlier. Norway's pivot, also on Thursday, was altogether more dramatic, with another quarter-point cut that none of the economists surveyed by Bloomberg predicted. With policy decisions from at least 18 central banks managing more than 40% of the global economy scheduled for this week, the easing in parts of Europe contrasted with a wait-and-see approach predominating around the world. The US Federal Reserve, Bank of Japan and Bank of England all held, as did policymakers from Pakistan to Turkey and Chile. All that comes against the backdrop of a July 9 deadline that could see the US reintroduce punitive trade tariffs across the world. Combined with continued uncertainty over the war in Ukraine and a potential US strike on Iran, it's left policymakers unwilling or unable to move. What Bloomberg Economics Says... 'Differing tariff impacts and labor market conditions help explain why the BOE and Fed are slower to cut rates than others. Right now, the war in Iran is driving another wedge. In the shale-rich US, higher oil prices raise inflation without hitting GDP, making it harder for the Fed to ease. In oil-importing Europe, higher inflation is accompanied by weaker growth, making the decision to cut an easier one.' —Jamie Rush, director of global economics. For more, click here The reasons for the rate cuts in Sweden, Norway and Switzerland are all linked to inflation — even if the situations diverge. Swiss consumer prices fell 0.1% from a year ago in May and new SNB forecasts published Thursday show inflation will average just 0.2% this year. That's primarily due to the haven franc, which has appreciated against the dollar and euro since Trump took office. Price pressure in Sweden has eased after a temporary spike at the start of the year and as a nascent rebound in the largest Nordic nation has fizzled out. That's allowing space for more stimulus, Riksbank Governor Erik Thedeen said Wednesday. The krona has been the best performer this year in the G-10 of major currency holders, surging 15% against the dollar, and also helping to reduce the risk of imported inflation. In Norway, price growth has been stickier over the last year, partly due to a weaker performance of the krone. Even so, a core measure of consumer-price growth last month matched this year's lowest level — 2.8%. The Norwegian central bank now sees headline price growth next year at 2.2%, down from 2.7% seen in March, while this year's inflation is still seen at 3%. The three institutions are also at very different stages in their policy paths: Norway's Thursday move is its first post-pandemic reduction in borrowing costs, while Sweden and Switzerland carried out their seventh and six moves respectively. Uniting them, however, is the fact that they all may cut again. Riksbank's Thedeen and Norges Bank Governor Ida Wolden Bache both told reporters as much, while SNB President Martin Schlegel wouldn't exclude such an option — even if that would push the Swiss rate into negative territory. (Updates with Bloomberg economics after sixth paragraph) Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P.
