The gold price has climbed to a two-month high of $1,825/oz. Despite the recent uptick gold is still 10% below its all-time high of summer 2020. As Myra Saefong notes in Barron’s, 2021 is set to be the metal’s first losing year since 2018. Its recent “drubbing” is perplexing, says John Authers on Bloomberg. Conditions over the last year should have boosted gold, which does best at times of high inflation (check) and monetary debasement (check). Instead, gold-mining stocks have been the worst-performing sector in the S&P 500 over the last year. Still, something might be about to shift. The ratio of US stocks to gold is running at a 16-year high, more proof, if any were needed, that American stocks are historically overpriced.
Gold bulls had been betting on widespread “revulsion” for paper currencies in the wake of massive money-printing by central banks, says Randall Forsyth in Barron’s. That revulsion has come, but it seems to have boosted cryptocurrencies (dubbed “digital gold”) rather than gold. “Fans of gold…arguably are the most contrary investors” and, at present, “perhaps the loneliest”.
Gold got carried away during the 2018-2020 bull run, says Eoin Treacy of Fuller Treacy Money. After a 75% jump it became overheated in summer last year. Still, this correction may be nearing its end after 18 months, “it is a good time to start looking at the sector again”.
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
-
Is a mortgage in retirement always a bad idea?A mystery shopper exercise shows high street lenders are “shunning” retirees looking to take out a mortgage. Are they right to do so?
-
Three funds to consider as UK small caps trade at 30% discountUK small caps have been unloved for some time, but a shifting economic environment could give them a boost
-
Gold’s allure and why you should never 'pay a premium for graded coins'Opinion It is easy to become distracted by the beauty of gold, but remember why you buy it, says Dominic Frisby
-
Investment opportunities in the world of Coca-ColaThere is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
-
Streaming services are the new magic money tree for investors – but for how long?Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
-
'Pension funds shouldn't be pushed into private equity sector'Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
-
Greg Abel: Warren Buffett’s heir takes the throneGreg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
-
Who will be the next Warren Buffett?Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Will Comstock crash – or soar?Opinion The upside for Comstock, a solar panel-recycling and biomass-refining group, dwarfs the downside, says Dominic Frisby.
-
'As AGMs go digital, firms must offer a new form of scrutiny for shareholders'Opinion Technology has rendered big AGM meet-ups obsolete, but the board still needs to be held to account, says Matthew Lynn
