Ever since we started commenting on the gold market we have maintained a bullish stance. Even suggesting back in August 2015 that producer hedging had an overall positive angle. In our last post we decided to temporarily exit our GBP/XAU position given the phenomenal run that gold had enjoyed in Sterling terms. Well, only a week later we are scaling back into GBP/XAU (out at £902 and back in at £867…. The old adage that “you never go bust by making a profit” springs to mind).
This post is not about being smug, its about reiterating the point that gold has many qualities, particularly for those who don’t base everything they own in USD terms. Simply by getting into gold, you are effectively getting out of your own currency which in most cases means diversification and risk reduction.
The other thing that we frequently talk about is that gold is a volatile commodity and therefore “buy and hold” whilst better than nothing, is not maximising the opportunity of being in this important asset class in the first place. The sky is becoming increasingly dark with all the black swans that are circling these days, so surely it must make sense to incorporate gold into an investment portfolio or a pension fund to provide yourself with protection and diversification in these uncertain times.