Gold’s strong start to the new year
Gold has raced off the starting blocks for 2021, hitting a two-month high on Monday.
Trading around $1,946/oz earlier this week, the gold price remains short of the all-time high achieved last August, when it hit an intra-day high of $2,075/oz.
Despite the dip since then gold investors are sitting on tidy profits. Gold rose by 22% in 2020 and has gained 65% since August 2018. It faces two key issues in 2021. Firstly, the vaccines, which have taken some of the shine off gold, says The Times.
As a safe-haven asset, the metal attracts less attention when the economy is doing well, as is expected this year. Investment bank analysts are cautious, with HSBC predicting gold will finish 2021 at $1,907; Bank of America predicts $2,060.
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
Secondly, bitcoin has emerged as an alternative hedge against inflation. The cryptocurrency’s surge may be diverting funds that would otherwise flow into precious metals, Delano Saporu of New Street Advisors Group told CNBC’s Lizzy Gurdus. Investors looking for a hedge against government currency debasement now have more options to choose from.
Still, if 2021 brings the inflationary scare MoneyWeek has been fretting about for some time, then gold is likely to gain new impetus. This week’s jump is giving gold bugs hope. A store of wealth for thousands of years, there is still nothing quite like gold.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Reeves urged to axe stamp duty from UK shares held in an ISAChancellor Rachel Reeves is reportedly considering axing stamp duty from UK shares held in stocks and shares ISAs. What could it mean for your portfolio?
-
Family investment companies explained: how the ultra wealthy shield their money from the taxmanWealthy families are increasingly turning to family investment companies to keep more of their money away from HMRC – but what are these arrangements and how do they work?
-
Yoshiaki Murakami: Japan’s original corporate raiderThe originator of Japanese activism, Yoshiaki Murakami, was disgraced by an insider-trading scandal in 2006. Now, he's back, shaking things up
-
Cash in on the vast growth potential of the companies electrifying the worldOpinion Martin Todd, portfolio manager, head of sustainable equities, Federated Hermes, highlights three electrification companies where he'd put his money
-
Galliford Try has firm foundations for strong growthBuilder Galliford Try has a finger in a wide range of pies, notably important work in the public sector
-
Card Factory is a stand-out small-cap going cheapIn a digital world, we still value the personal touch. That’s good news for Card Factory, whose unique business model is suited to weather all economic storms
-
8 of the best smallholdings for sale nowThe best smallholdings for sale – from a medieval cross-passage farmhouse in Taunton, Somerset, to a former farmhouse with an orchard in the Welsh Marches
-
How much gold does China have – and how to cash inChina's gold reserves are vastly understated, says Dominic Frisby. So hold gold, overbought or not
-
How to invest in undervalued gold minersThe surge in gold and other precious metals has transformed the economics of the companies that mine them. Investors should cash in, says Rupert Hargreaves
-
Debasing Wall Street's new debasement trade ideaThe debasement trade is a catchy and plausible idea, but there’s no sign that markets are alarmed, says Cris Sholto Heaton