Despite its recent decline, gold will continue to serve as an investors' "insurance policy" in 2010, said Rachel Benepe, portfolio manager of five-star rated First Eagle Gold Fund. (See Benepe's stock picks, below)
Benepe said as governments around the globe tentatively withdraw stimulus funds from their countries' fragile economies, gold will serve as a safe harbor.
"In case something does go wrong and there's unintended consequences, we feel gold will act as insurance for those events," she said.
Benepe admitted that large-scale investment demand is what has driven gold prices to record highs, and without support from central banks and large institutional investors such as hedge funds, the metal won't be able to maintain its high prices.
But she still believes gold will be a solid investment in the new year.
"I think the need for insurance is as real today as it was a year ago," she said.
Benepe Likes:
Randgold
Iamgold
Goldcorp
Newcrest
Kinross
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More Market Analysis:
- Winning Commodity Plays in 2010: Market Pros
- Buy Into 'Powerful' Rally in First Half of 2010: Strategist
- Art Cashin: Market Rally Can Hold — If This Happens
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Disclosures:
Benepe does not individually own shares of any of the companies mentioned above.
