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Is it still a good idea to buy gold?

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Anna Svahn
27 Aug 2019 | 2 min read
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For the first time since 2013, gold has passed the level of USD 1550 per oz. For those investors who have chosen to hedge the portfolio with the yellow asset, the recent weeks' turbulence in the stock market has not been quite as noticeable as for those who have been fully invested in equities. But in a situation when the price of gold in a relatively short time has gone from below USD 1300 to today's levels around USD 1530, the question is whether it is still a buying situation or if the opportunity was missed.

For the first time since 2013, gold has passed the level of USD 1550 per oz. For those investors who have chosen to hedge the portfolio with the yellow asset, the recent weeks' turbulence in the stock market has not been quite as noticeable as for those who have been fully invested in equities. But in a situation when the price of gold in a relatively short time has gone from below USD 1300 to today's levels around USD 1530, the question is whether it is still a buying situation or if the opportunity was missed.

In an interview that Erik Townsend did in the Macro Voices podcast with Brent Johnson, they discuss the future of gold. Townsend has said before that he is waiting for a downside in the gold price to around $ 900 before he wants to buy, while Brent Johnson says the situation to buy gold was one, two or three years ago and that if you already have gold in the portfolio should one does not refill today. However, Johnson believes that if you still lack gold exposure, there is always a way to scale in, no matter what the price is right now.

See gold as your fire insurance. If you already have one today, it is unnecessary to buy another more expensive one. However, if you still have not insured your portfolio then it is always location, regardless of price.

 
Gold has received a great deal of traction from the least troubled macroeconomic situation, though not quite as much as one might have expected. Investors are increasingly turning to investment opportunities that will guarantee as little loss as possible, rather than the possibility of high risk-adjusted returns. This has resulted in the bond market with a negative yield increasing explosively and today more than USD 16 trillion is allocated in interest-bearing securities with a guaranteed negative return.
 

Today, more than 30 percent of the total global bond market is allocated to interest-bearing securities with a negative yield, and it does not appear to be reducing or even flat.

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