There are three reasons why we believe that now is the right time to think about increasing gold exposure.

The first would be that broadly market valuations are high, which would suggest that equity returns over the next decade could be lower than in the past decade. Historically, that has often coincided with strong returns for gold and gold equities.

Secondly, the case for the US dollar over the coming decade is weak. Primarily, this is the function of very large US deficits. Again, when the dollar is weak historically gold has performed well.

Finally, and we think this is most important, there are global macro policy risks. These are as likely today as at any point since the second world war and the cause of that is record high global debt burdens.

The risk here is that macro policy responses could continue to be unconventional and potentially become more extreme, driving real interest rates very low or even negative.

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