Gold has rallied an amazing 24 percent in the first half of 2016. And experts are saying that conditions are in place for gold’s rally to potentially continue. Many markets are full of uncertainty, and gold has risen more than 8 percent since Britain’s “Brexit” vote to leave the European Union on June 23.
Government bond yields around the world have hit new lows, including yields in the U.S., U.K., Germany, France, Australia, Japan and elsewhere. Even Switzerland’s bond yields have fallen below zero.
Historically, investors have looked to gold as a store of value during times of economic uncertainty.
Since the financial crisis, Warren Buffett's Berkshire Hathaway has had significant exposure to financial stocks in its portfolio. Q1 2021 hedge fund letters, conferences and more At the end of March this year, Bank of America accounted for nearly 15% of the conglomerate's vast equity portfolio. Until very recently, Wells Fargo was also a prominent Read More
More compelling than ever?
Analysts with UBS say gold “is more compelling than ever” right now because of low and negative interest rates and global geopolitical risks. Credit Suisse believes the $1,500 an ounce mark could be tested as early as year’s end on prolonged macroeconomic uncertainty.
Where’s your 5 percent?
With gold having possibly entered the early stages of a new bull run, it might be time to consider gold stocks. U.S. Global Investors CEO and chief investment officer Frank Holmes maintains that investors should have 5 to 10 percent of their portfolios allocated to gold, including gold mining stocks and physical gold.
The Gold and Precious Metals Fund (USERX) and World Precious Minerals Fund (UNWPX) are both performing exceptionally well, with USERX returning close to 80 percent for the one-year period and UNWPX surging nearly 100 percent during the same period.