Athletes are about to go for the gold in Rio. But investors have been already doing that all year long.
Gold prices are up nearly 30% this year.
The yellow metal has been shining due to worries about the health of the global economy and continued concerns about the value of paper currencies in a world where interest rates around the world are extremely low -- and, in some cases, negative.
Gold often does well when investors are nervous. There's been an even more ferocious rally in some other precious metals.
Silver, for example, is up nearly 50% this year. At times of unease, a physical hunk of metal is something tangible that investors can hold and touch -- and help allay some fears about deflation, stagnant economic growth and political uncertainty.
Big-time investors like George Soros and Jeffrey Gundlach have been bullish on gold lately.
Some investors have been predicting that gold could even get back to all-time highs above $1,900 an ounce from 2011.
Gold still has a ways to go before it gets to those lofty levels again. It's currently trading at about $1,365.
Of course, if the current economic soft patch turns into something like 2008, then all bets are off. It's doubtful that gold or other metals could continue to thrive in a full-blown financial panic. Fortunately, few are predicting such a dire scenario.
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But even if there's no new market apocalypse on the horizon, there are some concerns that gold prices could still be close to reaching a peak in the short-term.
Rob Haworth, senior investment strategist at the Private Client Reserve at U.S. Bank, is worried that gold's run-up this year is nothing more than a classic speculative rally.
He didn't use the word bubble. But there does some to be some frothiness in the gold market.
"I'm surprised by the resilience in gold," Haworth said. "This is a rally running on speculative demand. I'm not sure there is enough fundamentally to push gold higher."
Haworth conceded that investors may be betting on further rate cuts from central banks in Europe and Japan. But he thinks that the U.S. Federal Reserve is itching to finally raise rates again -- which may not be great for gold.
"With higher rates, you'd think investors would want more yield -- bonds and dividend-paying stocks," he said.
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Still, it's hard to bet against gurus like Soros and Gundlach. And the U.S. presidential election could be the biggest wild card of all for gold.
A strategist at Dutch bank ABN Amro said in a report last month that gold prices could climb as high as $1,850 an ounce if Donald Trump beats Hillary Clinton in November.
"We expect that [Trump's] policies will be inward looking and will weaken the fundamentals of the US economy. In addition, his rhetoric and possibly policy actions could create domestic and international uncertainty at best, and upheaval at worst," said Georgette Boele, coordinator of currency and precious metals strategy at ABN Amro.
Boele conceded that a Clinton victory would probably lead to a much smaller rise in gold prices. But she still thinks gold could go up with a Democrat in the White House since the U.S. economy may remain relatively weak no matter who wins in November.
