What's Pushing Gold Higher?

Gold is on a tear, but will the rally continue? Writing for the BlackRock Blog, Heidi Richardson, Head of Investment Strategy for US iShares, explores what’s been pushing the yellow metal higher and whether or not there’s further upside.
She also contrasts investments in physical gold vs. gold miners.
As quoted in the publication:

When rates are rising, there is an opportunity cost for investors of gold since it doesn’t produce an income stream or pay a dividend. However in a negative rate environment, investors are paying money to issuers to “hold” their money. Rather than pay for that privilege, many investors opt for traditional stores of potential value like gold.
Thus, while it is true that global economic or political uncertainty, rising inflation and a weak dollar benefit gold prices, the most compelling argument for gold this year may center on central bank policy and the level of real interest rates. Notably, both the Bank of Japan (BOJ) and European Central Bank (ECB) have made it clear they will remain accommodative for the foreseeable future, and the Fed remains on hold.
In short, given the increased concerns of global growth slowing, oil price instability, the potential Brexit, and U.S. election, we think owning gold as part of a diversified asset allocation continues to be a sound approach.

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