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Metals Maven: Investors No Fools For Gold

Thursday, 5 Apr 2007 | 11:38 AM ET

Is gold really a good investment -- or does it sit in your portfolio like a brick? John Reade, head of metals strategy at UBS, gave "Squawk on the Street" viewers his take on the ancient commodity.

Reade noted how oil prices climbed during the recent diplomatic tensions between Britain and Iran, and asked why gold -- the traditional haven during times of strife -- didn't experience a similar rise. His conclusion: Whether the daily news is good or bad, investors these days keep "chasing the returns of high-yield instruments."

Gold Higher?
A look at the factors suppressing the price of gold, with John Reade, UBS head of metals strategy and CNBC's Erin Burnett

The glittering metal may be safe and relatively stable, but investors "generally expect the market to go higher" -- and gold has "ignored external, normally price-boosting, market factors."

The strategist expects gold, which closed up 1.2% on the Comex Wednesday, at $672.10, to move toward $700 over the next month, and $750 over the next three months.

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