The last two months of market volatility saw investors scramble to safe havens like bonds, but also gold. While uncertainty from U.S.-China trade wars, inverted yield curves and slowing global growth may cause investors to pile into gold, some analysts warn that exposure should not exceed 5% of one’s portfolio.

“Yes, gold has been moving up and from US$ 1,340 onwards, we have been suggesting exposure of not more than 5 percent of the portfolio to gold,” said Dr. Joseph Thomas, Head of Research, Emkay Wealth Management.

The movement of money into gold and its subsequent run-up in price was something seen during the financial crisis over a decade ago.

“The current move in gold has the potential to go back to the highs seen last time during the 2006-07 recession,” added Dr. Thomas. “What is actually giving gold the edge is the relative strength of the US dollar, the fears of a global slowdown, the probability of lower US interest rates, and the continuing trade and tariff war between China and the US, etc.”

However, loading up on what seems like a good thing now could translate to a bad thing later. As such, Dr. Joseph recommends the 5% allocation to gold.

“But, the exposure of portfolios to gold should be delimited to a small percentage of the total exposure and not more,” added Dr. Thomas. “Once economic growth starts picking up, gold will gradually start losing the sheen.”