Gold has risen for 12 years in a row. But it looks unlikely to extend its run to 13 prices have fallen by almost 25% this year, to a near three-month low.
The prospect of America breaching its debt ceiling hasn't given gold much of a lift, largely because markets seem to have assumed that a deal will be done.
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
This has been offset by, but not fully compensated for, strong demand for jewellery, coins and gold bars in Asia. But recently, Chinese demand has faded. So the short-term view is not encouraging.
However, investors should continue to hold a small amount of gold as insurance. Longer term, as incomes in emerging markets grow, demand for jewellery, or for protection from potential turmoil or inflation, should rise.
Emerging-market central banks continue to diversify their foreign exchange holdings. And an eventual surge in inflation following widespread money printing can hardly be discounted, notes Roger Bootle of Capital Economics especially if "at some stage governments and central banks... choose [higher inflation] in order to try to escape from the debt burden".
-
How to achieve a secure retirement, as more retirees admit to struggling with debtTwenty-six percent of retirees now have unsecured debt – a sharp rise compared to two years ago – with many underestimating how much a typical retirement costs
-
The key October self-assessment tax return deadlines to remember so you can avoid a shock billThere are two important dates for self-assessment taxpayers to remember in October
-
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.
