This is the start of a gold bull market, says strategist

Gold hitting 2-year high
Gold hitting 2-year high

Gold is at the dawn of a new bull market as financial risks abound, VanEck gold and precious metals strategist Joe Foster said Wednesday.

Foster spoke after gold rose to $1,377.50 an ounce, its highest since March 2014. The yellow metal is up nearly 29 percent in 2016, after three straight years of declines.

In addition to Britain's vote to leave the European Union, investors are grappling with financial risk as the U.S. Federal Reserve struggles to raise interest rates while central banks overseas ease them, Foster said.

"Radical or unconventional" monetary policy around the world and the possibility that U.S. stocks are topping out are also adding to concern, he added.

"Gold thrives on financial risk. When people look for a store of value, a currency hedge, a way to protect their wealth, they go to gold," Foster told CNBC's "Squawk on the Street."

He acknowledged that gold will experience a correction at some point, but said it has broken through the $1,300 level faster than anticipated. Also factoring in a tandem strengthening in silver, the moves suggest the runup in precious metals can continue at least through the end of the year, he said.

Foster invests in gold-related stocks such as miners rather than the metal itself. He said gold names tend to outperform the underlying commodity when it is on the rise.

The is up 115 percent year to date.

Mining operations are better operated than they were just a few years ago, Foster said. However, he warned that investing in these risky entities requires an abundance of research and scrutiny at the individual mine level.

Disclosure:The analyst and his family own shares of the VanEck International Investors Gold Fund, and VanEck holds greater than a 1 percent share of the fund