Will Gold Give Your Portfolio the Midas Touch?

The gold price has reached its highest levels since 2013 as fearful investors flock to the precious metal. But does it deserve a place in your portfolio? 

Kenneth Lamont 27 August, 2019 | 10:14AM
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As US-China trade tensions rumble on and threaten to throw a shadow across the across the global economy, investors have been turning to gold to protect their portfolios. The price of the yellow metal has climbed to levels not seen since 2013 and European Gold Exchange-Traded Commodities (ETCs) saw their largest net inflows for more than five years in June. But is now the time to add a small gold exposure to your portfolio?

The Case for Yellow

Within the spectrum of potential investments, gold stands apart. For centuries relied upon as a store of value in turbulent times, it holds little economic value and provides no cashflow. These unusual characteristics make gold difficult to value using traditional financial models. But the metal is widely considered a barometer for investor sentiment, with demand peaking in times of market distress and falling away in times of relative calm. 

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Kenneth Lamont  is a passive funds research analyst for Morningstar Europe.