Gold gains as faith in paper declines

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

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.

Recommended

Is the oil market heading for a supply glut?
Oil

Is the oil market heading for a supply glut?

Many people assume that the high oil price is here to stay – and could well go higher. But we’ve been here before, says Max King. History suggests tha…
16 May 2022
Why investors should consider adding Glencore to their portfolios
Share tips

Why investors should consider adding Glencore to their portfolios

Commodities giant Glencore is well placed to capitalise on rising commodity prices and supply chain disruption, says Rupert Hargreaves. Here’s why you…
13 May 2022
How to invest in the multi-decade boom in industrial metals
Industrial metals

How to invest in the multi-decade boom in industrial metals

The price of key industrial metals has already begun to rise. The renewable energy transition will take them higher, says David Stevenson. Here's how …
6 May 2022
Should you buy BP shares? The oil giant looks cheap, but approach with caution
Energy stocks

Should you buy BP shares? The oil giant looks cheap, but approach with caution

With the oil price spiking, BP shares look cheap on a price/earnings ratio of just over seven. But do they deserve a place in your portfolio?
5 May 2022

Most Popular

High inflation will fade – here’s why
Inflation

High inflation will fade – here’s why

Many people expect high inflation to persist for a long time. But that might not be true, says Max King. Inflation may fall faster than expected – and…
13 May 2022
Cryptocurrencies are crashing – so how low will bitcoin go?
Bitcoin & crypto

Cryptocurrencies are crashing – so how low will bitcoin go?

The entire cryptocurrency sector is crashing, with bitcoin now well below $30,000. This is big, says Dominic Frisby. So just how low could bitcoin go?
12 May 2022
What the Ukraine crisis might mean for ESG investing
Advertisement Feature

What the Ukraine crisis might mean for ESG investing

The Ukraine crisis has brought many of the issues around ESG investing into sharper focus. Where does the sector go from here?
3 May 2022