Alternative Outlook

Gold, the traditional safe haven for investors, has seen its price spike in the last few days, climbing above $1,600 for the first time since before Christmas.

Over the last 12 months, the gold price has nudged $1,900 and also has been close to $1,300, which shows it is hardly a steady investment. However, it is the traditional “refuge” investment as unlike shares, cash or even property the precious metal will always have a value.

Its portability and tangibility also make it popular in times of trouble. The recent contretemps between the US and Iran over the Straights of Hormuz have heightened concerns about political and economic stability and this has helped the gold price climb.

The Daily Telegraph quotes Nick Trevethan, a senior commodity strategist at ANZ, saying: “Gold may not be a safe haven in financial turmoil, but it does seem to function as a safe haven against real-world geopolitical risks.”

According to the newspaper, the manager of the BlackRock Commodities Income investment trust said gold prices could “easily touch” $2,000 an ounce next year.

It also quotes Angelos Damaskos, who says the price could potentially exceed $2,000 in the next six months, adding: “Gold continues to be an attractive safe haven and there is evidence of investors increasing their portfolio exposure to gold-related assets. This will support gold prices as investors seek alternative stores of value.”

You can buy physical gold in the form of coins or bars, but for most investors the easiest way to invest in the metal is either through a fund which invests in gold mining stocks or by buying an exchange traded commodity (ETC) which owns physical gold.