Why is the price of gold so high and is it time to buy or sell?
- Gold prices have surged to $5,095 an ounce, having earlier in the day tipped just above the $5,100 point, marking an increase of over 12 per cent in the last month and more than 83 per cent over the past year.
- This significant rise is attributed to ongoing geopolitical uncertainty, including trade tensions from the US and wider EU instability, alongside a weakening US dollar.
- Gold is considered a 'safe haven' asset, attracting investors seeking to preserve capital during market volatility, and is increasingly replacing long-term bonds as a defensive investment.
- While gold offers a store of value, it does not provide payouts like dividends or interest, and experts typically advise allocating no more than 5-10 per cent of a diversified investment portfolio to the precious metal.
- Investors can access gold through Exchange Traded Commodities (ETCs), which track its spot price, or by investing in gold mining companies, with some analysts forecasting prices could reach $6,000 before 2026 and potentially $10,000 by 2029.