According to a market analyst, the gold market continues to move from strength to strength. So, in a world full of uncertainty, it makes sense for investors to expect this trend to continue. So how much gold would it be wise for investors to keep in their portfolios?
There is a high probability that gold prices will end the year higher!
cryptokoin.comAs you follow from , gold prices reach new record levels almost every day. George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors, says he’s not surprised by this situation. Milling-Stanley states that at the beginning of the year, his team saw a 30% chance of gold prices rising to $2,400. At the same time, State Street sees a 50% chance of prices trading between $1,950 and $2,200. In this context, the analyst makes the following statement:
At the beginning of the year, we saw an 80% probability that gold prices would end the year higher than where they started. I don’t know if this rally is sustainable. $2,200 is a big number that could attract some sales.
It wouldn’t be surprising to see the market consolidate!
George Milling-Stanley continues to be bullish on gold. However, he says he wouldn’t be surprised to see the market consolidate lower in the near term. However, he adds that it is clear that the market has established a new base above $2,000.
Gold-backed ETFs have not had the kind of inflows seen in the futures market. This shows that Western investment demand is quite lackluster. However, Milling-Stanley notes that the longer this current momentum lasts, the more attractive gold will become to long-term investors.
How much gold would it make sense to hold in a portfolio?
Global economic uncertainty increases market volatility. Therefore, investors continue to see gold as a safe haven. As for how much gold investors should own, Milling-Stanley says that up to 20% of the portfolio would be appropriate in the current environment. In this regard, the analyst shares the following assessment:
A portfolio can benefit from a long-term strategic allocation of between 2% and 10%. If you are experiencing or expecting extraordinary volatility in the markets, it makes financial sense to double your allocation to gold. Over time, gold can help boost the returns of a properly balanced portfolio. And whether gold is going up, down, or sideways, it will also help reduce the volatility of your portfolio.
This is a positive situation for this shiny metal!
Although U.S. economic activity remains relatively strong, the threat of recession is not completely gone, Milling-Stanley says. There is still a lot of uncertainty about inflation and the Federal Reserve’s monetary policy, she adds. He notes that this uncertainty is a major factor behind the high volatility in the market. Based on this, the analyst comes to the following conclusion:
People’s expectations will continue to change suddenly. They will continue to change dramatically, which is positive for gold. Gold is certainly an important foundational part of a properly balanced investment portfolio.
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