Investors go into gold and shares of technology companies — JPMorgan
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JPMorgan believes that investors will increasingly prefer gold and shares of technology companies. Investments in these assets are expected to provide protection against a possible recession in the US this year, reports Bloomberg.
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What analysts say
According to analysts, the banking crisis in the USA has increased the demand for gold, since it is considered both as a bet on the softening of monetary policy and as a protective asset in the event of a “catastrophic scenario”.
JPMorgan also drew attention to the interest in gold from institutional investors. So, in the first three months of 2023, world central banks purchased 228 tons of gold. This is the highest figure for the first quarter since at least 2000, CNBC notes.
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As for shares of the IT sector, their share in portfolios has grown significantly this year, approaching the maximum of 2021. In addition, the shares of technology companies have the lowest share of short positions among all sectors, which means that the market as a whole is optimistic about the industry’s prospects.
JPMorgan noted that the strategy of buying gold and growth stocks combined with opening short positions against the US dollar seems to have already gained wide popularity in the market in recent months. The bank explained that in this case, the portfolio has a limited downside potential in the event of a mild recession in the US and, on the contrary, a large potential for growth in the event of a deep economic downturn.
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Source: Ministry of Finance
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