Episode 416 - On this week's show I discuss the outlook for the price of gold and how much you should hold in your portfolio. We then discuss what the options are if you can’t pay off your interest-only mortgage. Finally, the new energy price cap has been announced which takes effect from July. We explain what it will mean for your bills.
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Abridged transcript of Episode 416
Here are some of the highlights from this episode of the Money to the Masses podcast:
Investing in gold & its outlook
- Gold prices have rallied strongly, reaching around $1,950 per ounce and breaking the $2,000 level. $1,950 is a key price level from a technical analysis perspective.
- Interest rate expectations and monetary policy have played a significant role in the rally.
- Gold is seen as a haven asset during times of economic uncertainty.
- Investing in gold can be done through various options including coins, bullion, ETFs and unit trusts.
- Gold prices are volatile and investing in gold mining companies adds an additional layer of volatility.
- 80-20 Investor research suggests that holding a small amount of gold in a portfolio can help reduce volatility, however, holding too much actually increases your portfolio's volatility.
- Gold is not a hedge against inflation or volatility but can provide positive returns during market uncertainties.
- Holding around 5-10% of gold in a portfolio provides a good level for diversification and can reduce the portfolio's volatility. That's because gold performed strongly performance during recent equity and bond market sell-offs, especially in 2020 (pandemic) and 2022.
- Technical analysis indicates a potential long-term cup and handle formation in gold (see chart below), which would be bullish for the price of gold.
Paying off an interest-only mortgage
In this section of the podcast we discussed the options for those who are unable to pay off their interest-only mortgage at the end of its term. In the resources section below there is a link to an article which provides full details of what was discussed.
Energy price update
In this section of the podcast we discussed the latest energy price cap update and what it means for consumers' bills. In the resources section below there is a link to an article which provides more information.
Gold price cup and handle formation:
Click to enlarge