Gold Prices Soar as State Street Analyst Recommends Strategic Allocation

State Street's George Milling-Stanley suggests holding up to 20% of portfolios in gold as prices reach new record highs.

XAU Market's Resilience

Amidst global uncertainty, the gold market remains robust, with prices consistently reaching new highs, asserts George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors.

Milling-Stanley's team anticipated a 30% chance of gold prices surging to $2,400 per ounce at the beginning of the year, with a 50% probability of trading between $1,950 and $2,200. Currently, June gold futures are trading at $2,261 an ounce, indicating a nearly 1% increase for the day.

Sustainability Concerns

While optimistic about gold's future, Milling-Stanley expresses caution, suggesting a potential market consolidation at lower levels in the near term. However, he notes the establishment of a new floor above $2,000 an ounce.

Despite subdued Western investment demand, Milling-Stanley believes that prolonged momentum will attract long-term investors. He advocates for a strategic allocation of up to 20% of a portfolio in XAU, particularly amidst market volatility.

Economic Uncertainty and XAU Role

Concerns linger over the possibility of a recession and inflation, driving market volatility. Milling-Stanley underscores gold's significance in balancing investment portfolios, irrespective of economic conditions.

With the Federal Reserve maintaining interest rates and inflation on the rise, Milling-Stanley anticipates a decline in real interest rates, benefiting XAU while potentially impacting bond markets and the U.S. dollar.

Conclusion

Milling-Stanley's insights highlight gold's resilience amidst economic uncertainty, recommending strategic allocation as prices soar to unprecedented levels.