Gold set to suffer in the long-term – JP Morgan

Dhwani Mehta FXStreet

In the view of the strategists at JP Morgan, sentiment around gold could dampen in the long-term if investors start moving their allocations away from gold and into cryptocurrencies.

Key quotes

"The adoption of bitcoin by institutional investors has only begun, while for gold its adoption by institutional investors is very advanced."

“Bitcoin only accounts for 0.18% of family office assets, compared with 3.3% for gold ETFs. This means that tilting the needle from gold to bitcoin would represent the transfer of billions in cash.”

“If this medium to longer-term thesis proves right, the price of gold would suffer from a structural flow headwind over the coming years," wrote JP Morgan's strategists.

However, “there's a good chance that Bitcoin prices have overshot and gold is due for recovery.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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