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Gold prices can go a 'good deal higher': strategist

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Investors queasy over market volatility and uncertainty surrounding the seemingly never-ending U.S.-China trade war are helping drive demand for gold.

Central banks around the world also appear to be on the gold bandwagon embarking on a recent buying spree and showing no signs of slowing. The World Gold Council reported that global gold-backed ETFs and similar products had $2.6 billion of net inflows in the month of July.

“I think that we can probably go a good deal higher from where we are. I was surprised at the speed of the rise in June and July,” said George Milling-Stanley, State Street Global Advisors' chief gold strategist, adding that after the Federal Reserve announced an interest rate cut, the precious metal jumped between $150 to $200 an ounce within a month. “The way things are looking at the moment, we seem to be consolidating above the $1,500 level. And I think that means that gold's got a pretty good platform to continue higher.“

As global market and geopolitical worries mount, gold seems to be unstoppable and only going higher. In an interview with Yahoo Finance’s On The Move, Milling-Stanley, said we’re in a ‘unprecedented period of uncertainty’ which means more people look to gold as a safe haven investment. State Street’s research shows that year-to-date, SPDR Gold Shares (GLD) has attracted $3.5 billion in net new inflows.

Ingots On Wooden Table
Ingots On Wooden Table

It’s never a bad time to invest in gold

But are prices too high for those looking to invest?

”I don't think there's a bad time to gain exposure to movements in the gold price provided one is in it for the long-term. Gold performs very, very well over the long-term. The lesson of thousands of years of history — that's what it taught us,” said Milling-Stanley, adding that the day-to-day movements in the price are not relevant when gold is incorporated in a balanced portfolio. His suggestion, have somewhere between 2% and 10% of your portfolio in gold.

“I'm not somebody who's saying the price is going to the moon, you should put 100% of your money into gold,” he said. “But I do believe that gold has a very strong strategic role to play within the context, as I say, of a properly balanced portfolio. “

Yvette Killian is a producer for Yahoo Finance’s On The Move.

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