Gold gains as faith in paper declines

Gold has fallen for four years on the trot, but 2016 could be a different story.

Andrew Van Sickle
By
published
in Features

Gold has fallen for four years on the trot, but 2016 could be a different story. The yellow metal leapt by 20% in the first quarter, its best three-month performance since the global crisis erupted in late 2008. The equity market wobble in January helped bolster gold's safe-haven appeal, while negative interest rates have also stimulated buying, says Kyle Caldwell in The Daily Telegraph.

They have rendered bonds less appealing 30% of high-quality sovereign paper is on a negative yield and make gold's lack of income less of a disadvantage.

Negative interest rates also fuel fears that central banks may be running out of options, and gold does best when people lose faith in central banks, says BullionVault.com's Adrian Ash. They would lose even more faith in them if inflation makes a comeback. Hold on to your gold.

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Andrew Van Sickle
Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.

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