Gold "is back from the wilderness", says Jack Farchy in the FT. After a year of treading water it has jumped by more than 12% in two months. It is back to around $1,800 an ounce and has reached new record peaks in euros and Swiss francs. The bull market that began in late 2001 should continue.
Not only has the US Federal Reserve launched a further and this time unlimited quantitative easing (QE), or money printing, programme, but the European Central bank is prepared to buy unlimited quantities of peripheral bonds. The Bank of Japan has also cranked up the presses again.
The market's perception is that "expansionary monetary policies, with all their attendant inflation and currency debasement risks, are back on the agenda for an unlimited time and in seemingly unlimited size", says Morgan Stanley. This is fuelling demand for gold, a traditional currency and store of value that can't be debased through printing.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The emerging world, notably central banks keen to diversify foreign-exchange holdings, is "a growing source of demand", says Deutsche Bank. China will overtake India as the main source of jewellery demand this year. Meanwhile, production problems caused by strikes in South Africa suggest that supply is not going to expand fast to meet growing demand.
The technical picture is encouraging too, as US asset manager BlackRock points out. The 50-day moving average recently rose above the 200-day moving average. This so-called "golden cross" formation is a strongly bullish signal and last happened after the Federal Reserve's first QE programme was launched. If gold's performance over the next few months mirrors its action back then, prices should hit $2,400 by next summer.
-
Premium Bonds winners announced – did you scoop the September jackpot?NS&I has announced the winners for September’s Premium Bonds prize draw, with two lucky savers becoming overnight millionaires. Did you win this month?
-
What is the 25x retirement rule and does it work?The 25x retirement rule has been around for decades but many experts question if it is a suitable strategy
-
Can Donald Trump fire Jay Powell – and what do his threats mean for investors?Donald Trump has been vocal in his criticism of Jerome "Jay" Powell, chairman of the Federal Reserve. What do his threats to fire him mean for markets and investors?
-
Freetrade’s new easy-access funds aim to beat top savings ratesFreetrade has launched an easy-access exchange traded fund (ETF) range - here’s how the ETFs work and how they compare to the savings market
-
Go for value stocks to insure your portfolio against shocks, says James MontierInterview James Montier, at investment management group GMO, discusses value stocks and slow-burn Minsky moments with MoneyWeek.
-
Where do we go from here?Features A new series of interviews from MoneyWeek
-
As China reopens, why pick an income strategy?Advertisement Feature Yoojeong Oh, Investment Manager, abrdn Asian Income Fund Limited
-
Income in the USAAdvertisement Feature Fran Radano, manager on The North American Income Trust
-
The challenge of turbulent marketsAdvertisement Feature Today, ISA investors face one of the most challenging economic environments seen in recent years. However, good companies can still thrive, even in the toughest economic conditions. That’s why BlackRock’s fund managers focus on these businesses when they’re looking for investment opportunities.
-
What the return of the bond vigilantes means for investorsAnalysis The US Federal Reserve is dancing to the tune of the bond vigilantes, says Max King. Here’s what that means for stockmarket investors, the economy, and you.
