Portfolio dispersation: 20% in Investment gold

The gold market continues to move from strength to strength and in a world filled with uncertainty, investors should expect this trend to continue, according to one market analyst.

Gold prices are notching new record highs on nearly a daily basis.

The comments come as June gold futures last traded at $2,258.30 an ounce, up nearly 1% on the day.

Path is clear for gold prices pushing to a high of $2,400 an ounce. At the same time, State Street sees a 50% chance of prices trading between $1,950 and $2,200. 

Although Western investment demand has been fairly lackluster, as gold-backed ETFs have not seen the type of inflows that the futures market has, Milling-Stanley said that the longer this current momentum lasts, the more attractive gold becomes to long-term investors.

He added that he expects it's only a matter of time before investors embrace gold as a safe-haven asset as global economic uncertainty drives market volatility higher. As to how much gold investors should own, in the current environment, Milling-Stanley said as high as 20% of a portfolio would not be inappropriate.

Although U.S. economic activity remains relatively robust, threat of a recession hasn’t completely disappeared. There is still a lot of uncertainty surrounding inflation and the Federal Reserve’s monetary policy.

Even if the U.S. economy does avoid a recession, inflation is not expected to go away. Federal Reserve tightening cycle is over, and even if they don’t cut interest rates three times this year, gold should continue to benefit.