SMM1 8: BNP Paribas wealth management company (BNP Paribas Wealth Management) said investors who want to hedge against the threat of worsening tensions in the Middle East should buy gold and sell the currencies of oil-importing countries such as Turkey and India.
If the dispute between the US and Iraq worsens, gold could climb to $1650 an ounce or a seven-year high, said Shafali Sachdev (Shafali Sachdev), head of Asia foreign exchange at (BNP Paribas) wealth management company (Wealth Management) in Singapore. Other safe haven assets, such as the yen and the Swiss franc, will also rise, she said. "in this case, gold is a better hedging tool than oil," Sachdev said at a briefing in Singapore. "the secondary market is the currency that will benefit from higher oil prices."
Gold prices have risen about 3 per cent in the past week to $1562 an ounce after the US announced that drone strikes killed Iranian general Kassem Solemani (Qassem Soleimani) in Iraq. The yen rose to a three-month high on Monday.
Safe haven assets gave up some of their gains on Tuesday as oil prices fell. Brent crude oil traded at $68.01 a barrel, down from a three-month high of $70.74 on Monday.
BNP also recommended buying the Russian rouble, saying the oil-producing country's currency would benefit from higher crude oil prices.
Here are some other investment ideas from BNP:
The yield on the 10-year Treasury note is likely to be around 2 per cent by the end of the year, as the Fed's (Federal Reserve) will stand still
The dollar will continue to be supported by higher interest rates than in other developed countries
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