At times of uncertainty, gold is an investor’s “weapon of choice”, says Myra Saefong for MarketWatch. The yellow metal has been on an impressive run this year, breaking through the $1,800 an ounce level last week to hit a nine-year high. In sterling terms gold has long surpassed its 2011 peaks. At £1,436/oz, it is up by 25% in a year.
The Royal Mint’s precious metals division says that sales tripled during the first half, says Shane Hickey in The Observer. Trading apps are helping bring a new generation into the precious metals market: 25-34-year-olds are the “fastest growing demographic”, says the Royal Mint’s Andrew Dickey. It is the monetary backdrop that largely explains the gold surge, Ross Norman of Metals Daily told Saefong. The waves of stimulus unleashed by the Federal Reserve and other central banks to fight the pandemic have sparked renewed concerns that inflation will return and that bond yields could plunge even further south. The result is that gold “seems to have recovered its mojo”.
The yellow metal’s most significant drawback is that it pays no interest, but at a time of near-zero interest rates and negative (or near-negative) government bond yields, not many other safe assets do either. That increases the attractions of one of the oldest stores of wealth. Record low interest rates are not going away, David Coombs of Rathbones tells Jeff Prestridge in The Mail on Sunday, so the rally should have further to go.
Subscribe to 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
How much further? Goldman Sachs thinks the metal will hit $2,000/oz over the next 12 months, reports Callum Keown in Barron’s. With the US engulfed in another wave of the virus it will fall to Chinese investors – the world’s largest retail buyers – to drive the rally higher. The present climate is proving “ideal for gold”.
-
8 of the best properties for sale with indoor swimming poolsThe best properties for sale with indoor swimming pools – from an award-winning contemporary house in East Sussex, to a converted barn in Hampshire
-
Chinese stocks slump on first trading day of 2025Chinese stocks suffered in the new year from their worst first day of trading since 2016, despite a state stimulus package
-
Why Wise could be worth a lot more than its share price impliesForeign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
-
Can The Gym Group pump up your portfolio?Gym Group was one of the best UK small-cap stocks in 2024 and will beef up your profits this New Year
-
MoneyWeek's five predictions for investors in 2025MoneyWeek's City columnist gazes into his crystal ball and sees five unexpected events in store for investors in 2025
-
How to invest in battery metalsDespite recent weakness, battery metals that are powering electric vehicles are worth a look
-
How buy-and-build stocks deliver strong returnsBunzl, DCC and Diploma became successful through buy-and-build – rolling up dozens of unglamorous businesses. How does it work and what makes it successful?
-
Singapore Technologies Engineering shows strong growthSingapore Technologies Engineering offers diversification, improving profitability and income
-
Why undersea cables are under threat – and how to protect themUndersea cables power the internet and are vital to modern economies. They are now vulnerable
-
Warren Buffet invests in Domino’s – should you buy?What makes Domino's a compelling investment for Warren Buffet's Berkshire Hathaway, and should you buy the UK-listed takeaway pizza chain?
