Asia-Pacific goldbugs fly as political, economic uncertainties swirl

Investors across the Asia-Pacific (APAC) region are turning to gold, lured by its diversification and haven benefits at a time of uncertain economic growth and rising geopolitical risks.

Asia-Pacific demand has ensured gold prices continue to hover around the record levels struck last month as investors lose faith in other underperforming asset classes like equities and property.

“The investment appetite for gold has grown structurally as prices are supported by consumption demand and as a shelter from geopolitical risks,” said Gary Ng, a senior economist at French investment bank Natixis. “As gold is now perceived as an integral part of a portfolio to diversify risks, the interest from APAC asset managers is likely to sustain and even grow further.”

Echoing these views, Min Lan Tan, head of the APAC chief investment office at UBS Global Wealth Management, said the big unknown for Asia was the upcoming US election and the potential of a tariff shock should Donald Trump be elected.

“If we get a Trump victory, then the level of uncertainty is going to rise much more,” she said, adding that to hedge a potential tariff shock UBS is taking long positions in gold, among other assets.

Meanwhile, a survey conducted jointly by State Street Global Advisors and the World Gold Council and published on Wednesday showed that over the next 12 to 18 months, 27 per cent of APAC asset owners plan to increase their gold investments. That compares with their North American counterparts, where only 21 per cent expect to do the same.

The survey, which interviewed 850 consultants, financial advisers and institutions globally, including 63 asset owners based in APAC, also found that 76 per cent of the asset owners in the region already have exposure to gold, which is on par with their peers in North America.