00:00Well, the price of gold has hit yet another record high.
00:03An ounce will now cost you more than 4,000 US dollars as investors flock to the safe haven asset.
00:10The price has jumped by around a third since April when US President Trump announced a raft of trade tariffs.
00:16It's gold's biggest rally since the 1970s.
00:20Well, the rise in gold prices is hitting jewelers, with some resorting to price increases and using alternative materials.
00:27Justin Urquhart-Stewart is an investment manager and a veteran business commentator.
00:32Justin, good to see you.
00:34Thank you very much for coming in.
00:35I mean, gold always soars at a time of uncertainty.
00:38Clearly, investors are feeling that uncertainty now.
00:42What are they worried about?
00:44Well, how long is the list?
00:45There are a lot of things we can get concerned about.
00:47Well, first of all, markets around the world have all done very well indeed.
00:51But to add to that, then, what happens to the global economy?
00:54Is the global economy peaking? Is it going to start slowing down again?
00:57Then add to that the political issues we've got in terms of what happens in Ukraine and other areas of the world which are looking more unstable.
01:04So there are lots of things to worry about.
01:06But markets love climbing a wall of worry.
01:09Otherwise, what would we be doing?
01:11So basically, people are now saying, actually, let's find something safer.
01:15But be wary of gold because it's all very well.
01:18It goes up and price goes down.
01:20It doesn't do anything else.
01:21For investment in the long term, it's compounding of dividends and those returns.
01:26That's how you make your wealth.
01:27With gold, you can look at it, stare at it, lick it.
01:29That's about it.
01:31So, yes, in times of fear.
01:32But be wary.
01:33The price has been shooting up over the past year, as you were just saying.
01:37And be careful now because this year's fashion fad tends to be next year's tank top.
01:41So you always see when those asset prices reach a certain level and they have a record for this year and last year, be wary.
01:47There's a very good chance it could be the worst performer next year.
01:50One industry that's stuck with gold, if you like, is the jewellery industry.
01:53Obviously, it uses it to make many of its products.
01:56Their costs have now gone up, of course, and they must be passing some of those on to the consumers.
02:00And passing it on, but also rather worrying because it's getting so expensive now that people actually put off because, yes, they'd like to have gold, but at what price?
02:08And also, if they're going to buy gold, then, well, Hank, is this a long-term investment or is it just purely decorative?
02:13Remember, in countries like India, you're going to have a wonderful piece of decoration.
02:16It's the weight of the gold that's important.
02:18But also now be careful because of the caliber and quality of it.
02:22So be wary.
02:23This is exactly the moment when you start seeing other people trying to devalue it by adding other substances.
02:28So how pure is it actually going to be?
02:30So for investors, be very wary indeed.
02:33And if you're actually holding physical gold, do be careful because people can nick it.
02:37Much better, actually, that people buy probably via a gold fund.
02:41And that is reflected by your custody of gold in secure places like Fort Knox and elsewhere, rather than necessarily worrying about having at home even if it's in a safe.
02:49Your health warnings are noted, but the uncertainty around the world doesn't show any signs of going away, does it?
02:55So this high gold price, will it go higher perhaps?
02:58And you've got to get your crystal ball out on this, haven't you?
03:01Where is it going to go?
03:02Well, it's only one or two ways, isn't it, up or down.
03:06But no, the momentum of the private investment market coming out into this could push this further.
03:11What's interesting, actually, is the number of institutions now actually starting to take some profits.
03:16That's the time when you actually have to say, right, now the professional investors are starting to pull back.
03:20They've already made money, they've, as far as they're concerned, they'll be shutting the shop up for that particular asset class.
03:26Bank that and let's wait for the next one.
03:29So, and it's always the case when you know the market's reaching a peak, when the private investor, the royal private investor comes in at the top, suckered in by yet more opportunities, saying,
03:38it's a record price, it's going to go where?
03:42So be very careful indeed.
03:44So you've said be wary, be careful of gold.
03:46So what other safe havens are there out there if investors don't fancy buying into gold?
03:51Well, I mean, the good news is actually your long-term returns in stock markets are precisely that.
03:57You've got good quality companies which are making returns, making dividends.
04:00Those dividends are vital, that compounding over time.
04:05You know, with gold, how often does it take to actually double your money?
04:08Actually, with companies, you can sit there and say, if I've got a 7% return, I'm going to double my money every 10 years.
04:13That may not sound wildly exciting, but if you're doing financial family planning over the generations, that's what you need to have.
04:20Don't be rather wary of investing in those ones which suddenly become that fashion for the moment, only to look really rather embarrassing a little bit later.
04:28I know, I've done it too many times.
04:30Justin, thank you very much for coming.
04:32Justin Urquhart-Stewart, the investment manager and business commentator.
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