Insurance Giant Buys Gold for the First Time in 152 Years
Gold got a significant endorsement today from one of the world's largest insurance companies.
Northwestern Mutual Life Insurance Co., the third-largest life insurer in the United States, has bought gold for the first time in the company's 152-year history to hedge against continued declines in other asset classes.
The insurance giant has accumulated about $400 million in gold over the past several months. Northwestern Mutual Chief Executive Officer Edward Zore was quoted in Bloomberg saying, "Gold just seems to make sense; it's a store of value... The downside risk is limited, but the upside is large. We have stocks in our portfolio that lost 95 percent." Gold "is not going down to $90."
The move may prompt other insurance companies to follow suit. It makes sense for insurance companies to hold gold since gold is always an asset and can never be considered a liability.
Gold prices are up slightly today to $980 an ounce.
- luke
