Price of gold may rise by up to a fifth in 2019 as equity volatility continues, group of investors claim

December 23, 2018

New York (Dec 23)  It may be more wishful thinking than based on hard analysis but nearly 80 per cent of precious metal investors believe the gold price will rise next year.

The investors, surveyed by online bullion dealer Bullion Vault, argue that heightened geopolitical tensions are likely to drive gold higher.

Continued stock market volatility will also be a factor as nervous investors ditch equities for 'safer' alternatives.

Outlook: Investors, surveyed by online bullion dealer Bullion Vault, argue that heightened geopolitical tensions are likely to drive gold higher.

Nearly one in four believe gold prices could rise by as much as 20 per cent, although the consensus is for an increase of 10 per cent.

In dollar terms, gold has fallen over the past year although it spiked up in recent weeks to above $1,250 an ounce. In August it was trading at just above $1,180.

A number of fund managers have recently concluded that gold is now worth holding. Among them is David Coombs, head of multi-assets at investment house Rathbones, who has built a three per cent gold stake in £540million fund Rathbone Strategic Growth Portfolio.

Coombs recently told The Mail on Sunday that the gold holding was a 'hedge' against a Brexit deal not being struck and the UK falling into recession as a result, accompanied by stubborn inflation.

Investment trusts Personal Assets (managed by Troy Asset Management) and Ruffer have longstanding exposure to gold. Personal Assets holds eight per cent of its assets in gold bullion while Ruffer has seven per cent exposure through gold mining shares.

For most investors, the cheapest way to invest in gold is through exchange traded funds – an investment that tracks the price.

They are run by the likes of iShares (part of investment giant BlackRock) and Invesco. They can be bought through brokers and most fund platforms.

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