Why US Investors Should Not Buy Gold: Strategist

Gold hit a record high above $1,250 an ounce on Tuesday as concern over Europe's economic outlook lifted risk aversion. So is there still room for investors to buy the precious metal?

Richard Bernstein, chief executive of Richard Bernstein Capital Management and a CNBC contributor, and Francisco Blanch, head of global commodity research at Bank of America Merrill Lynch Global Research, offered their insights.

“There is a clear case to own gold in this environment, so that’s one commodity we still like,” Blanch told CNBC. “As long as interest rates stay extremely low, the opportunity cost of holding gold is close to zero.”

But Bernstein said U.S. investors should not be investing in gold.

“If you’re a euro-based investor, there’s a much stronger case, but in the U.S., the dollar is rallying—and has been for the last two years,” he noted. “And inflation expectations are falling.”

“So if we have a rising dollar and falling inflation expectations, I find it hard to justify buying gold for a dollar-based investor,” he said.

Scorecard — What they Said:

  • Bernstein's Previous Appearance on CNBC (May 28, 2010)
  • Blanch's Previous Appearance on CNBC (May 13, 2010)

More Opinion on Gold:

CNBC Data Pages:

CNBC Slideshows:


CNBC's Companies in the News:




  • McDonald's Global May Sales Rise 4.8%

Goldman Sachs


No immediate information was available for Bernstein or Blanch.