|ORO Y PLATA INTERNACIONAL S.A.
Super-rich investors buy gold by ton
The world's wealthiest people have responded to economic
worries by buying gold by the bar -- and sometimes by the ton --
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
"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.
UBS is recommending top-tier clients hold 7-10 percent of their assets in
precious metals like gold, which is on course for its tenth consecutive
yearly gain and traded at around $1,314.50 an ounce on Monday, near the
record level reached last week.
"We had a clear example of a couple buying over a ton 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
"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."
Billionaire financier George Soros, echoing comments from investment
guru Warren Buffett, last month described gold as the "ultimate bubble"
because it is costly to dig up and has no real value except its market price.
But a rising price for the precious metal has in itself generated more and
more demand from investors looking for a way to hedge against a fresh
recession. Gold bears no yield and is uncompetitive in an environment of
rising interest rates.
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.
UBS's Stadler said the precious metal has become a staple of investors'
portfolios, despite questions about whether it makes for a smart long-term
"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."
Anthony DeChellis, managing director of Credit Suisse's Americas private
banking unit, said at the Reuters summit in New York that clients are more
interested in capitalizing on the rise in gold prices than using the precious
metal as a safe-harbor investment.
"They're asking, 'If it's a bubble, how far can I ride that bubble,'" he said. "I
cannot say we've seen a spike in gold interest, but there's an interest in
the phenomenon of it."