Mathieu Racheter, head of equity strategy research at Swiss private bank WisdomTree[/tag[ believes that gold’s move back above $4,000 reflects a more supportive macro backdrop following Democratic gains in the US midterms. A weaker dollar and falling Treasury yields, including real yields, are easing two key headwinds. “The prospect of political gridlock adds uncertainty over US policymaking, while stalled negotiations with Iran and the risk of renewed military action reinforce gold’s appeal as a portfolio hedge,” Shah said.

Asset allocation in detail
Strobaek is overweight in equities and keeps an overweight allocation to developed and emerging market equities. Within developed markets, he remains overweight in Japanese stocks and underweight in UK stocks. Strobaek has raised US equities to overweight from neutral and lowered European equities from neutral to underweight. In emerging markets, he prefers South Korea, Taiwan, Brazil and China. He has added IT to his favoured sectors, alongside healthcare, materials, utilities and financials. Consumer staples remain his least preferred option.

Strobaek is overweight in fixed income. He maintains his overweight exposures to emerging market bonds in hard currency and a neutral allocation to global government bonds, favouring five- to seven-year maturities in the US, UK, eurozone, Switzerland and Australia. He keeps an overweight position in UK gilts in sterling-denominated portfolios. In credit, he is neutral on high-yield and investment grade bonds.

Strobaek maintains a neutral exposure to gold. He has upgraded his view on the US dollar against developed market currencies from neutral to positive and downgraded his outlook on the euro to negative. He believes that the dollar should remain supported against lower yielding major currencies, particularly the euro. He has shifted from a positive to a neutral view on emerging market currencies. See more here about the US mid-terms.