Goldhas gained around a fifth in 2016 and at a price of around $1,300 an ounce it is at its highest level in over a year. According to the World Gold Council, demand rose by 21% to 1,290 tonnes in the first three months of 2016, the second-highest quarterly level on record.
Equity-market turbulence and weak economic data boosted demand for an asset that typically thrives on bad news. Negative interest rates and bond yields around the world make gold's lack of yield less of a disadvantage; the investors expect further interest-rate rises in the US to be postponed, further burnishing gold.
Gold may struggle in the short term as better US and Chinese data allay fears over the global economy, and a rate hike by the Fed could temper its momentum too. But it should continue to look appealing in an environment of negative rates, while we worry that the Fed could be blind-sided by a return of inflation, which would give demand for the traditional store of value another fillip.
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Gold, as Solita Marcelli of JP Morgan Private Bank says, remains "a great portfolio hedge".
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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