The merits of Gold in portfolios
BY JUL 25, 2019 ||
The Bloomberg chart below shows a decisive longer-term breakout of gold in USD terms and a worthy technical rationale for our current overweight position in bullion again. Political risk and uncertainty combined with the possibility of the continuing deflation phase are more fundamental rationales.
As summarised by Richard Harwood in his Weekly View a couple of weeks ago, it’s a mixed up, muddled up, shook up world and diversification is king. Even the most unlikely of scenarios can play out and with US 10 year interest rates at these levels and with a significant amount of the World’s bonds in negative territory, it is appropriate to have gold back in our asset allocation models.