(Yicai) March 22 -- Investors should not consider gold as an asset similar to stocks but as part of their long-term portfolios, the China chief of an international trade association for the safe-haven asset said as gold prices surged to a record high following the Federal Reserve's decision to keep interest rates stable for now with three planned rate cuts for this year.

"For retail investors, the biggest mistake in gold investing is a hasty entry and exit," Roland Wang, managing director of the China arm of the World Gold Council, said in an interview with Yicai.

Gold is a strongly independent asset class as price movements are less correlated with those of traditional financial assets, Wang said, adding that the precious metal is a non-yielding asset. This is why gold investors should make their decisions based on long-term perspectives and risk diversification rather than focusing on short-term fluctuations, he explained.

Gold prices jumped to break through USD2,200 per ounce yesterday, and spot gold briefly hit a historic high of USD2,222.29 per ounce after the American central bank refrained from the first rate cut since March 2020 but promised to still hold onto three cuts for this year. The three major US stock indexes of the S&P 500, Dow Jones Industrials, and Nasdaq 100 ended the day at all-time highs yesterday while Bitcoin rose above USD67,000 again.

Gold has been in high demand since the Covid-19 pandemic amid geopolitical tensions, high inflation, and tight financial policy.

It is not uncommon for asset prices to rise or fall together during major financial crises or extreme policy changes, Wang said. However, when there are linked declines, gold prices could fare the best and rebound the quickest, he added.

In both developed and developing countries, the majority of central bank reserve managers believe that the trend of diversification will continue, leading to an increase in gold reserves, according to a survey conducted by the World Gold Council every two years.

China and India are the largest buyers of gold, making up 55 percent of the global demand last year. But Wang said that there is still significant room for development in terms of professional gold investment, including derivatives. North America remains the biggest market for gold exchange-traded funds, followed by Europe, as Asia equals just a fraction of the market leader's turnover.

Editor: Emmi Laine