From Perceived Safe Haven Asset to Strategic Allocation

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Gold has been perceived as a safe haven investment, with flows in and out as risk levels rise and fall. But increasingly, investors recognize the value of long-term strategic investments in an asset that provides a number of benefits.

It’s said that too much of a good thing can be wonderful — unless the good thing is an eight-year bull market about to enter its ninth. In a global environment that grows increasingly uncertain, with mounting geopolitical and economic concerns, it’s no wonder that investors are growing anxious and going back to basics. Economically, there’s nothing more basic than gold. But there’s more to the story: Even as many investors habitually retreat into the safe haven of gold, a growing number also recognize its benefits as a diversifying asset class that can lower portfolio volatility and provide a respectable return.

Gold returned just over 9 percent in 2016, which it could match again in 2017, and the medium-term forecast is positive. “We’re looking at moderate price increases well into 2018,” says George Milling-Stanley, head of gold strategy at State Street Global Advisors. Since the second quarter of 2013, gold has traded at between $1,150 per ounce at the bottom and $1,350 at the top. The overhead resistance of that range was tested recently, in September of 2017, at just above $1,350. “But the price couldn’t make a sustained breach — it usually takes several tries,” he says.

同时，低点蔓延更高。黄金朝着其支持水平倾向于最后四次利率徒步旅行。“从历史上看，这往往会发生在跑步之中，”他说。在这些时期，他解释说，投机者往往会延长美元，期望它走高，而且短金，期望它随着速度而疲软。一旦速度上升套装，许多人通过销售美元并返回金牌来展开这些交易。每次，黄金已经发现在连续较高的水平上的支持，这通常是更高的前兆。在接下来的12-18个月内，当投机者可能会注意到，价格也可能存在显着的尖峰。

Against this backdrop, State Street sees a growing number of institutions and high-net-worth individuals making long-term strategic allocations to gold. “This isn’t tactical, safe-haven buying,” says Milling-Stanley. Gold typically isn’t correlated with other assets, it provides diversification, and it’s more stable than many believe. Its 11–12 percent annualized volatility is marginally lower than the S&P 500 and in line with Berkshire Hathaway or Johnson & Johnson — and significantly lower than the 25–30 percent annualized volatility of the FANGs.

Positive dynamics exist within the gold market, as well. Decent economic growth in emerging markets continues, which not only supports a strong jewelry business, but also generates strategic investment. “The level of interest in gold as an investment from asset owners in emerging markets has become distinctly elevated,” Milling-Stanley says. Devaluations and other currency fears generate much of the interest.

Furthermore, since 2010, many countries are boosting their gold reserves as they sell U.S. Treasury securities. As a group, emerging markets have less than 5 percent of their reserves in gold, compared with about 70 percent for the advanced economies of Western Europe and North America. “We’re reminded each day that the world is a risky place,” says Milling-Stanley. “Those focused not on today’s or tomorrow’s risk, but on the overall level of risk that we live under, know the value of a long-term strategic allocation to gold.”- 霍华德摩尔

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Exp. Date: 11/30/2018