Gold in a Post-Pandemic Landscape

12.30.21 - 1933 Gold Coin Sells for $18.9 Million

Gold last traded at $1,813 an ounce. Silver at $23.00 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday in thin pre-holiday trading. U.S. stocks inched higher in early light trading after the S&P 500 and DJIA closed at new records.

WGC/Wall Street Journal--"In uncertain times, investors traditionally turn to gold. It's tangible and solid when everything else seems in flux.

For nearly two years, the Covid-19 pandemic has wreaked unprecedented upheavals across the world. Reflecting this uncertainty, the price of an ounce of gold soared from $1,474 on March 19, 2020, to $2,067 by Aug. 6, 2020 - an all-time high. It has eased somewhat since then but remains mostly in a range above $1,700.

As the pandemic continues, daily life has assumed a new normal. But the uncertainty persists in the form of supply-chain and labor problems, which are driving inflation higher for the first time in three decades....

Reacting to bad news is no way to run a portfolio, investment advisers say. Instead, build a portfolio with a long time horizon and diversify it so that not all of its components are affected in the same way during market turmoil.

'You choose assets that will work together to improve the risk-adjusted returns of your portfolio,' says George Milling-Stanley, chief gold strategist at State Street Global Advisors.

Because gold tends to rise when stocks fall, the yellow metal can be a valuable diversification tool. 'I think of gold as a long-term strategic investment rather than a short-term tactical one,' Mr. Milling-Stanley says.

'The question of timing or entry point becomes less relevant if you're making a strategic investment over the long term. What gold is likely to do in the next few months is less relevant.'....

A little bit of gold has long been considered a way to reduce risk in portfolios. In a widely diversified portfolio, the traditional allocation has been between 2% and 10%, depending on factors including the investor's age and risk appetite."