(MENAFN) Gold prices have surged to near-record highs recently, as investors express concerns about the possibility of a deepening US financial crisis and a potential recession this year. JPMorgan strategists suggested that the "long duration" trade, which involves being overweight on gold and growth stocks, has become increasingly popular in recent months. The United States banking crisis has prompted investors to seek gold as a hedge against a catastrophic scenario and as a proxy for lower real rates. The strategists believe this trade could be relatively attractive, given its limited downside in a mild recession scenario and potential for significant upside in a deeper recession.
Institutional investors are reportedly turning to gold, while retail investors are boosting their exposure to Bitcoin. The report noted that the share of technology in global equities has risen sharply this year. The strategists argue that gold and growth stocks are becoming a consensus trade, given the ongoing economic uncertainty. As investors seek safe havens, gold prices are likely to remain high, potentially even breaking records in the coming months. However, it remains to be seen how the global financial situation will play out and how long this trend will continue.
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