By James Connington
Gold has experienced a major rally this year, but opinions are divided about whether there is more to come.
The past few years have not been smooth sailing for those who hold gold. From a peak of about $1,900 an ounce in 2011 – after a decade of near constant growth – the price sank to just over $1,000 late last year.
But since January gold has rebounded, surging back past $1,300 an ounce. The eight best-performing funds over the past year are now all gold funds, according to data service FE Trustnet.
Investors have piled into gold – seen as an insurance policy against stock market volatility and the threat of inflation – in the face of poor global growth, including fears over the slowdown in China and the EU referendum.
The question facing them now is whether there is more to come, or if it’s time to take profits and run.
Experts are split on the issue, particularly as the price of gold reacts heavily to investor sentiment.
Nick Peters, a multi-asset portfolio manager at Fidelity, has recently bought gold for two of his total return funds.
He said: “Gold has benefited just as much from an easing in headwinds as any support from jittery investors. With yields [on other assets] expected to remain lower for longer, the traditional drawback of gold, that it yields nothing, is less of an issue.