Is the gold rally over? Gold hit a four-month low around $1,807 an ounce this week. The yellow metal remains up by 53% since August 2018 but is now trading 11% short of its peak this summer. The picture is similar in sterling terms, with gold 13% off its August high on around £1,352/oz. Gold is seen as a traditional safe haven. With positive vaccine news stoking optimism about 2021 investors are now keen to get exposure to the recovery rather than parking their wealth in an asset that pays no interest.
Gold has not behaved much like a safe-haven this year, says Will Horner in The Wall Street Journal. “Rather than moving in the opposite direction to stocks” it has often rallied and fallen together with them. The reason seems to be central bank stimulus. When new money hits the market investors buy stocks to enjoy the resulting asset price inflation, while buying gold as protection in case everything goes horribly wrong. A “6,000-year history as a store of value” makes the metal the ultimate hedge for those concerned about inflation.
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
-
Rail fares to be frozen for first time in 30 years – how much could you save?Chancellor Rachel Reeves will use her Budget to freeze rail fares but the savings could be offset by tax rises
-
Circle sets a new gold standard for cryptocurrenciesCryptocurrencies have existed in a kind of financial Wild West. No longer – they are entering the mainstream, and US-listed Circle is ideally placed to benefit
-
Circle sets a new gold standard for cryptocurrencies
Cryptocurrencies have existed in a kind of financial Wild West. No longer – they are entering the mainstream, and US-listed Circle is ideally placed to benefit
-
8 of the best converted industrial properties for saleThe best converted industrial properties for sale – from a Victorian railway station in Norfolk to a Grade II-listed former water tower with views of the River Alde
-
More clouds gather over renewable energy trusts – is there any hope for the sector?The outlook for renewable energy trusts has gone from bad to worse this year, with the industry being caught in a 'perfect storm'
-
Should ISA investors be forced to hold UK shares?The UK government would like ISA investors to hold more UK stocks – but many of us are already overexposed
-
Why Scotland's proposed government bonds are a terrible investmentOpinion Politicians in Scotland pushing for “kilts” think it will strengthen the case for independence and boost financial credibility. It's more likely to backfire
-
Who is Jared Isaacman, SpaceX astronaut and Trump's pick as NASA chief?Jared Isaacman is a close ally of Elon Musk and the first non-professional astronaut to walk in space. Now, he is in charge of NASA
-
Three solid British stocks going cheapOpinion Ian Lance and Nick Purves, fund managers at Temple Bar Investment Trust, highlight three British stocks with strong cash flows and robust balance sheets
-
Is now a good time to invest in Barclays?Barclays' profit growth is healthy, and the stock is cheap compared with its rivals
