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Gold regains glitter amid rising market angst

Gold is glittering again on Wall Street. The yellow metal, which has a reputation as a haven, or safe place to park cash in turbulent times, is attracting increased buying from antsy investors as the record-setting stock rally stalls out, political risk in Washington grows and stocks approach September, which historically has been the S&P 500 stock index’s worst month.

Even though gold is up nearly 11% this year, which is better than the S&P 500’s 9% gain, Wall Street pros still think gold can be an effective hedge and offer protection to investors’ portfolios during what could be a turbulent September. The biggest driver of gold prices could be the uncertainty surrounding approaching deadlines facing Congress related to the nation’s budget and raising of the debt ceiling.

Gold has gotten a boost from President Trump’s failure to get key parts of his stimulus plan, including tax cuts, passed by Congress. That has pushed down inflation and the value of the dollar, as well as the outlook for the economy, all of which bolsters the case for investing in gold.

“Going forward, gold’s performance may be closely linked with what happens in D.C.,” Russ Koesterich, co-portfolio manager of BlackRock’s Global Allocation Fund, said in a report. He says it’s not just turbulent markets that propel gold prices higher, but also policy uncertainty. “For now, I would rather bet on gold’s diversifying properties rather than political instability,” he wrote.