Gold (GC=F) June futures opened at $4,811.80 per troy ounce on Friday, 0.1% higher than Thursday's closing price of $4,808.30. The gold price is holding steady in early trading.
Silver (SI=F) May futures opened at $78.66 per ounce on Friday, 0.1% lower than Thursday's closing price of $78.71. The price of silver moved upward in early trading.
Gold and silver prices are holding steady this morning after reports that Israel and Lebanon agreed to a 10-day ceasefire. President Trump is optimistic that a long-term agreement will be reached in the coming weeks. Other world leaders believe a permanent deal could take several months. However, this ceasefire is paramount to Iran's agreement to reopen the Straight of Hormuz.
Stocks and oil prices have certainly reacted favorably to the progressing peace talks. The S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC) ended Thursday by hitting record highs, and Brent crude oil (BZ=F) prices are holding steady this morning.
The Fed is watching the peace talks closely and the overall impact on inflation. But the Fed's Stephen Miran said inflation concerns aren't solely tied to the war in Iran. He said yesterday that the inflation picture has been worsening since December, before the war began.
Lingering inflation could prompt the Fed to raise interest rates in response later this year, although there's just about 100% certainty the Fed will hold rates steady come their next rate-setting meeting, according to the CME Group's FedWatch tool.
Higher borrowing costs tend to suppress gold and silver demand and pricing.
The opening price of June gold futures on Friday was 0.1% higher than Thursday's close. Here's a look at how the gold price has changed versus last week, month, and year:
The opening price of silver futures on Friday was down down 0.1% from Thursday's close. Here's how the opening silver price has changed versus last week, month, and year:
A gold investment can add stability and inflation protection to your portfolio. But it can also dilute your gains when stock prices are rising quickly. Finding the right balance between gold's diversification benefits and profiting from growth potential in other assets can be challenging.
Even the experts are divided on how to achieve the correct balance. Below, five experts explain their recommended gold allocations, which range from 0% to 20%.
Robert R. Johnson, professor at Creighton University's Heider College of Business, does not advocate gold investing. In his words, "while having a small position in precious metals may dampen portfolio volatility in the short-run, the tradeoff between slightly dampened volatility and the lost long-term return is certainly not a prudent one, particularly for Gen Z/millennials with long investing time horizons."
Brett Elliott, director of content and SEO at American Precious Metals Exchange (APMEX), recommends setting an allocation that aligns with your investing goals.
Growth-oriented investors may be comfortable with an allocation of 10% or 15%, according to Elliott. But income investors will prefer a smaller position, because gold provides no yield. A 2% to 5% gold allocation can provide some resiliency without an excessive drag on income potential.
Blake McLaughlin, executive vice president at Axcap Ventures, said historical data support a gold allocation of 5% to 8%. "Gold may not offer the outsized return potential of private investments," according to McLaughlin, "but the metal holds a set of attributes that are increasingly hard to ignore." Those attributes include the metal's resilience amid economic uncertainty and geopolitical unrest.
Thomas Winmill, portfolio manager at Midas Funds, believes most investors will benefit from a long-term gold allocation of 5% to 15%. Winmill specifically advocates investing in gold mining companies through a mutual fund.
Your risk tolerance and current mix of financial versus hard assets can guide you to an appropriate allocation, according to Winmill.
Vince Stanzione, CEO and founder at First Information, recommends a 20% gold allocation, specifically in physical gold or a gold ETF. Stanzione argues for higher exposure to gold as a wealth protection strategy. As he says, "gold keeps with inflation and gold retains its purchasing power," while paper currencies are devaluing around the world.
Whether you're tracking the price of gold or silver since last month or last year, the price-of-gold chart and the price-of-silver charts below show the precious metal's change in value so far this year.