Gold favoured by rich as inflation hedge

More wealthy people are buying gold to protect their wealth from the risk of rising inflation after central banks boosted stimulus, according to Deutsche Bank's asset and wealth-management unit.

"Gold has historically been considered to be a store of value and an inflation hedge and increasingly it is being utilised as a monetary instrument," Mark Smallwood, head of Asia-Pacific wealth-management, said. "There is a growing interest among our clients to gain exposure."

Gold has increased in value every year of the past 12, and immediate-delivery gold is trading at about US$1,770 an ounce.

"With the movements by the central banks globally in the past few weeks, there is considerable investor concern as to the long-term effects of the liquidity infusions," Smallwood said. "As a result of that, private clients are concerned about the possible future effects of inflation and the means of hedging that risk."

The Bank of Japan said last week it would expand a fund to buys assets following the United States Federal Reserve's move to buy US$40 billion of mortgage-backed securities a month.

Beijing also has approved infrastructure plans and the European Central Bank gave details this month of a programme to buy debt of member states.