Author: Paul Ploumis22 Apr 2015 Last updated at 06:37:46 GMT
(Kitco News) - Gold has even more competition when it comes to being the ultimate store of value, according to the chief executive officer at BlackRock.
Since gold’s major selloff in 2013, commodity analysts have noted that the precious metals market has struggled to attract long-term investment interest, competing with all-time high equity markets, a stronger U.S. dollar and potentially higher interest rates.
And now the metal has to compete with skyrocketing property values in specific markets and contemporary art, according to Laurence Fink, CEO of one of the world’s asset management companies.
He said that instead of purchasing gold, investors are turning to other real assets, most notably real estate in New York, Vancouver and London and contemporary art. According to a Bloomberg article, Fink made the comment as a keynote speaker at the Credit Suisse Global Megatrends Conference in Singapore, Tuesday.
“The two greatest stores of wealth internationally today is contemporary art… and I don’t mean that as a joke, I mean that as a serious asset class… the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London,” he said at the conference, according to the Bloomberg article.
“It’s become much more accessible for global families worldwide to store wealth outside their country,” he added. “And they don’t have to own gold.”
According to the Bloomberg article, the median sales price for a condo in Manhattan rose to $1.3 million in the first quarter of 2015, hitting a six-year high. Property values in London rose 2.5% in April, the article said.
In Canada, Vancouver has been one of the hottest real estate markets in the country. According to the latest data from the Canadian Real Estate Board and Association (CREA) the average price for a home in the greater Vancouver area rose to C$869,299, an increase of 3.3% from February’s average price of $841,333.
Annually, Vancouver has seen home prices rise 11.5%. Just outside of Vancouver, in Fraser Valley, home prices have increased 10.1% annually, according to the CREA data.
Although the gold market has seen lackluster interest, it has still been able to attract some investment capital. SPDR Gold Shares (NYSE: GLD) the world’s biggest gold-backed exchange-traded fund saw total positive investment flows of 28.22 tonnes in the first quarter of 2015.
Since the start of the month investor flows have been relatively stable rise 1.82 tonnes to 739.06 as of Monday, according to data compiled by the ETF.
Courtesy: Kitco News