Gold is a unique asset class due to its uncorrelated nature and its ability historically to perform well amidst global financial and geopolitical turmoil. We think of it as financial insurance. Like health or auto insurance, a small allocation can go a long way when hardship occurs.

While it was disappointing to see gold fall below $1,200 per ounce, even though we expected it too and forecasted this in our prior commentaries, current extreme positioning (also characteristic of the lows in 2001) suggests the price will not remain at these levels for too long.