Investors who have recently jumped on the gold bandwagon will need plenty of patience this year, as the anemic global economy and better prospects for the U.S. dollar combine to dim gold’s allure.
While buyers are likely to see their gold holdings rise in value for a 12th consecutive year, any advance is expected to be more modest than in recent years.
Muted returns from gold would test short-term traders. Yet those who own gold as a long-term answer to currency concerns and for portfolio diversification could find their patience is rewarded. Investing in gold-related companies is also a reemerging trend.
“I don’t think (gold) will be the slam dunk that it has been,” said Jay Feuerstein, chief investment officer at 2100 Xenon Group, a Chicago-based managed futures fund. Short-term gold speculators are likely to have a tougher time with the metal this year, he added.
