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
-
UK dividends rose in final quarter of 2025, but share buybacks ate into investor payoutsLast year saw dividend growth continue to fall below pre-pandemic averages, against a backdrop of increasing share buybacks.
-
Lifetime ISA reform: Retirement option could be scrapped in overhaulA consultation on a product replacing the Lifetime ISA is set to be launched this year, and the option to use it to save for retirement is expected to be axed in the shake-up
-
Three promising emerging-market stocks to diversify your portfolioOpinion Omar Negyal, portfolio manager, JPMorgan Global Emerging Markets Income Trust, highlights three emerging-market stocks where he’d put his money
-
Coface offers excess profit in an unloved sectorCoface is a world leader in trade-credit insurance with key competitive advantages in a niche market
-
Exciting opportunities in biotechBiotech firms should profit from the ‘patent cliff’, which will force big pharmaceutical companies to innovate or make acquisitions
-
How to invest in the new breed of payment providersUpstart payment providers are taking the world by storm. It’s time for investors to buy in, says Rupert Hargreaves
-
What turns a stock market crash into a financial crisis?Opinion Professor Linda Yueh's popular book on major stock market crashes misses key lessons, says Max King
-
How to add cryptocurrency to your portfolioA new listing shows how bitcoin might add value to a portfolio if cryptocurrency keeps gaining acceptance, says Cris Sholto Heaton
-
Profit from pest control with Rentokil InitialRentokil Initial is set for global expansion and offers strong sales growth
-
Three funds to buy for capital growth and global incomeOpinion Three investment trusts with potential for capital growth, selected by Adam Norris, co-portfolio manager of the CT Global Managed Portfolio Trust
