The issue of consultants’ debate is for gold as a market royale
Thanks to stock market volatility and leadership coming from Washington, some fear inflation could be higher. Gold It is again at the top of many financial professionals’ minds.
A year later SPDR Gold Trust ETF (GLD) He got nearly 27% and excelled. S&P 500 Index; Financial advisors are weighing their options regarding new allocations to the precious metal.
“Investors should consider precious metal exposure in their portfolios for diversification,” said Corey Voorman, president of Corey Voorman. Forman Investment Advisor in Plymouth, Michigan
Citing more upward pressure on gold prices, Voorman cited gold’s strength in the wake of interest rate hikes in 2022 and 2023.
“Gold is a non-yielding asset so, typically, when rates rise, it puts downward pressure on gold prices,” he said. “Increasing interest in central banking around the world has passed the marching order with flying colors.”
Stephen Colano, chief investment officer at Integrated Partners in Waltham, Massachusetts, typically uses precious metals as a proxy for real interest rates relative to future inflation.
“Gold and silver will perform well when inflation is expected to rise, and markets are concerned that interest rates will not be enough to slow the rising rate of inflation,” he said. “Over the last few years, you’ve seen that relationship continue to grow.”
Nicholas Kodola, senior portfolio manager at Brinker Capital Investments in Berwyn, Pennsylvania, looks at the pros and cons of allocating to gold in the current environment.
On the positive side, he described gold as a “highly volatile asset with low correlation to stocks and bonds.” Codola sees a “tail wind” in the form of purchases by international central banks.
Codola is cautious about the recent strong performance, which “could signal a pullback and real interest rates tend to challenge gold.”
Above $2,600 an ounce; According to Taylor Krystkowiak, investment strategist at Greenwich, Connecticut-based Themes ETFs, the yellow metal may hold up in the near term.
“Typically, what we’ve seen is gold continues to consolidate and move sideways after a big start, making a new floor,” he said. “I think we’re seeing the early stages of that.”
As a separate portfolio position, Pamela Horak, founder Your financial mother He said gold often attracts risk-averse investors in Lake Wylie, South Carolina.
“What I’ve found is that precious metals are not suitable for clients with large fixed income portfolios because they don’t pay interest or dividends, and there can be expenses,” she says. “Precious metals can drag on returns and provide no income.”