Add gold into your portfolio when the price is right

When we construct portfolios, it is good to allocate a small percentage of the portfolio into gold. This is because gold tends to rise when crisis happens.

However entry level of gold is paramount. We want to buy gold below "all in sustainable cost of production" for gold miners. This refers to exploration cost + office expense + cost to maintain the gold mine.

The cost of production for gold major companies ranges from 1100 to 1800 per ounce. Hence if we can buy gold below 1150, this will provide margin of safety to our portfolio.

Gold cannot stay below cost of production for too long. When gold price is below 1150, many gold mine will be closed down, this will reduce fresh supply of gold in the market, thereby creating upward pressure for gold price