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Still not time to invest in gold: investment strategist

Gold is certainly not glittering anymore for investors. Since its peak in 2011, gold prices have plunged more than 40%.

This year, the yellow metal fell out of favor in China, as well. The demand for gold in the second quarter dropped to its lowest level in six years for both retail investment and jewelry, according to an industry report by GFMS.

Investing in gold did not pay off for the last four years and despite its low prices, now is still not the time to get in, advised Brad McMillan, chief investment officer at Commonwealth Financial Network. “Not just yet. We’re not yet at a point where you want to move into it…when you buy something, you’d rather have it beaten down than at the top of the range,” he said.

McMillian thinks there’s still more room for gold to slide, “it’ll probably take a further hit. Just because it’s cheap now, doesn’t meant it can't get a whole lot cheaper.”

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Both European and Japanese central banks stimulating their economies, the strong dollar and the chaos in the Chinese markets are all trends the investment officer is keeping a close eye on. “The thing to keep in mind with gold is, at certain points, it’s an asset you want to have in your portfolio; other points, you don’t want to touch it,” said McMillian.

McMillian thinks, “gold is…the king of disaster protection,” but other metals come close as alternatives. “Silver, although in much lesser extent, because silver is also an industrial metal…but palladium and platinum come pretty close,” he said.

“Really gold is an unique asset,” McMillian said.

 

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