Message: Super-Rich Investors Buy Gold by Tonne
By Laura MacInnis GENEVA | Mon Oct 4, 2010 11:55pm IS
(Excerpts) GENEVA (Reuters) - The world's wealthiest people have responded to economic worries by buying gold by the bar -- and sometimes by the tonne -- and by moving assets out of the financial system, bankers catering to the very rich said on Monday. Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.
Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit. "They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest.
We had a clear example of a couple buying over a tonne of gold ... and carrying it to another place," Stadler said. At today's prices, that shipment would be worth about $42 million.
Julius Baer's chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness.
"I see gold as an insurance," Van Anantha-Nageswaran said. "I recommend 10 percent as minimum in portfolios and anything more than that to be used for trading purposes, to respond to short-term over-bought or over-sold signals."
"If you talk to ultra-high net worth individuals that level of uncertainty has never been higher in the last two, three, four years," he said. "If they ask me 'is inflation going up or are we entering a deflationary cycle?', I don't know. But obviously nobody knows." Samir Raslan, Citigroup's regional head for central, eastern and northern Europe, Africa and Turkey, said clients were not going overboard on gold. "I wouldn't say that clients are over-investing. It's part of an asset allocation but it's not something that they are deciding all of a sudden," he said
The uneasy outlook for inflation, hard currencies and global growth has triggered a five-fold increase in a physical gold fund launched by Pictet one year ago, the Swiss private bank said.
http://in.reuters.com/article/idINIndia-51931720101004?rpc=401&feedType=RSS&feedName=businessNews&rpc=401
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