In a background of growing global uncertainty, this news service visited Paris to meet Edmund Shing at BNP Paribas Wealth Management to discuss the asset outlook and increasing demand for safe haven assets such as gold and the rising demand for commodities such as silver, copper, and tin needed for artificial intelligence, tech and renewables.

After record-high prices for gold in recent weeks, Edmund Shing, global chief investment officer at BNP Paribas Wealth Management, highlighted his preference for gold as a safe haven as well as for silver, copper and tin needed for artificial intelligence (AI), tech and renewables.

The drivers of the recent rise in gold include concerns over tariff-induced inflation and a slowing US economy, steepening developed market bond yield curves and a weaker dollar.

In an interview this month, Shing told this news service that the big story at the moment is commodities and precious metals. “Gold does well in an uncertain environment and is seen as a safe haven. Confidence in the dollar is down and emerging markets are reducing their exposure to the dollar in favour of gold as their relation with the US is not the same as it was,” he said.

“Gold has been an enormous bull market but a lot of people haven’t invested. There is a lot of potential there due to the uncertainty,” Shing continued. “But investors are generally cautious of gold, despite the fact there has been huge outperformance of gold compared to US stocks since 2000. That’s a big, big story and investors still don’t appreciate it. But they are starting to get into it.”

“I also like silver – the poor relation of gold.The Saudi Arabia Sovereign Wealth Fund got a big stake in silver recently. It is good for jewellery, and it is a lot cheaper than gold, but it is more important for industrial demand for use in solar power and electronics and it is easier to access than gold,” Shing said. “There is more upside in silver. It tends to be a bit ignored but it's catching people’s attention. We are seeing a big move in gold but perhaps silver is the next one.”

Shing said there needs to be more commodity exposure. “They are super important from a geopolitical standpoint as well as for supply. There has not been much investment in commodities for so long and production can’t respond to growing demand in the short term. Demand for commodities has increased a lot,” he said. “Copper demand has increased and will continue to grow as it is required in things like defence, tech, electrification, electric vehicles. They all need more copper. Copper demand will rise, but there are no new copper mines.”

“Chile will struggle to produce more. Prices will go up and they will continue [to do so]. Tin is also used in technology like mobiles, iPads and demand is increasing, but it is under invested. There is no technology and AI without metals,” Shing continued. “We want more AI and tech so we need more metals. Rare earth metals are important. Without silver, we don’t have solar panels and that’s why demand is rising.”

“There isn’t more silver production. Gold, copper and silver prices are rising but many investors don’t have exposure to it. The Swiss like gold but investors in general are cautious,” he said.

Swiss private bank Lombard Odier also continues to value gold’s role within portfolios as a diversification and risk hedging tool, and as a complement to other exposures in an environment that it believes still favour balanced investment risk taking. The firm raised its exposures in July and keeps them in line with its asset allocation levels.

Equities
On equities, Shing sad his preference were for UK, South Korea and Japanese equities. He also likes European mid-small caps, despite the French political drama, and puts more of a domestic focus as exporters have to deal with US tariff hikes and currency movements.

Like a number of wealth managers, Shing has seen movement away from US equities, due to the uncertain environment, towards European and emerging market equities. “China has been a good performer this year but investors are still wary of investing in China."

With regard to sectors, he likes banks, mining, healthcare, financials, and commodities. “Healthcare has underperformed a lot and has a lot of potential for the treatment of age-related diseases, for instance. Danish healthcare firm Novo Nordisk helps to treat diabetes, but can also reduce heart problems and Alzheimer’s. We are also seeing huge progress on cancer which has been poorly treated. We need to have better diagnostics to find cancer. If they get it early, it can be treated. AI can help in this,” he added.