Have you missed the boat with gold?

The answer to that is a resounding No….if you are an individual looking at gold for its safe haven/wealth preservation qualities.
Gold is actually behaving in a much more mature way these days, almost resembling a grown up asset class. Sure, you’d be feeling smug if you’d bought at sub $1,100 levels but in the big picture it doesn’t matter whether you got in then or are getting in at today’s level of $1,275.
A hedge fund manager looking to “trade” the market would disagree wholeheartedly with that statement but then his job is to maximise returns by trading ranges and jumping on trends whereas us mortals just want to hang on to what we’ve got in these uncertain times.
I have gold in my portfolio because it helps me sleep at night. I know that it will trade sideways to lower while all’s well in the world, but I also know that the next time my UK or US equity holdings take a knock for one of any number of reasons, I’ll probably have an overall positive outcome thanks to gold.
The LBMA Analysts forecast an average range for 2016 of $978-1,231, so that worked well!
The thing to remember with gold is that it goes through cycles of being a commodity and a financial asset/currency. Gold has been a currency since before the credit crisis of 2008 and yet the smartest forecasters still like talking about cost of production….. forget it. The gold price is not being driven by fundamentals in the mining industry, its not even being overly influenced by the huge scrap flows into and out of India. Its all about the fear factor being exercised by people around the world who want to either diversify their risk away from conventional investments or simply to reduce their exposure to their own currency which is either yielding a negative interest rate or is in danger of depreciation. Gold neutralises all those risks and it really doesn’t matter what the perceived cost of production is or where your entry level is to a great degree.
You could draw an analogy with Bitcoin to an extent. Whilst Bitcoin holders have a very different motivation to gold holders, you could say that “entry level” is simply not relevant to Bitcoin investors. If you’ve decided to participate then it makes no odds whatsoever whether you bought in at $420 or $470 you are simply “in” (or you are not!) and whilst the payout profile is likely to be more binary for Bitcoin, I could imagine gold forecasters changing their philosophy to a much more asymmetric forecast next time around with a greater acceptance to a proper upside number!

Matthew KeenHave you missed the boat with gold?