Gold Outlook 2017: Further upside likely

Here at Salt Financial Group we are staunch believers  of ‘Portfolio Diversification’. Diversification is the necessary basis of every portfolio as it provides both insurance and security within a customised investment environment.  

When constructing an investment portfolio, careful understanding and selection of investments within specific asset classes is essentially a proven way to manage portfolio risk, as it lowers the overall volatility of the portfolio.  To demonstrate this we look at the historical data of investment markets which confirms the negative correlation levels that occur between asset classes. Due to various influences a particular asset class may perform well within a particular economic environment, whereas another may be challenged within that same environment. 

Furthermore, we believe that a well-constructed portfolio should include a level of exposure to gold. Gold is a long term universal commodity which provides both stability and liquidity.  Gold rises in value when inflation takes hold. As a result, during inflationary times, gold can offer a much more stable investment than other asset classes.

Globally, countries sell their currency futures, treasuries, and other securities around the World. Looking back through history we recognise that this is subject to political and economic chaos, whereas Gold maintains stability plus in negative and high inflationary times gold shines.

Gold is used in the production of various products including jewellery and electronics, there is a reliable demand that further stabilizes the price of gold. Moreover, in times of increased demand, these markets can force the price of gold higher.

In summary, we feel there is a place for gold in every well-constructed investment portfolio.

Here is a detailed and interesting article which has recently been issued, we urge you to read and consider its message.

Jenni Anderson