Can gold keep going up?

Gold has 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.

Gold, as Solita Marcelli of JP Morgan Private Bank says, remains “a great portfolio hedge”.