Tags: barrons | gold 2019 | glitter

Barron's: Gold Can Continue to Soar While Stocks Stumble

golden dollar symbol over hundred dollar bills
(Badboo/Dreamstime)

Wednesday, 02 January 2019 09:04 AM

Gold has been proving to be just the kind of hedge against market chaos that some investors hope for when they buy it.

As a result, the precious metal is poised to continue rising in the new year while stocks continue to struggle, Barron’s reported.

While the S&P 500 has tumbled 16% during the past three months, gold has gained 8%, Barron’s reported. Meanwhile, gold outperformed every Group of 10 currency in 2018 except the yen, the U.S. dollar, and the Swiss franc, observes Société Générale currency strategist Kit Juckes.

“Fair to say, then, that it’s mixing it with the safer-haven crowd.” he writes.

“The reason for thinking positively about gold at the moment is that we have deteriorating dollar fundamentals and an absence of reasons to like pretty much any other currency,” Juckes writes.

The metal hit a six-month high nearing $1,300 an ounce, Bloomberg reported. 

Spot gold climbed as much as 0.5 percent to $1,288.83 an ounce, the highest since June 15, and traded at $1,286.86 at 11:25 a.m. in London, according to Bloomberg generic pricing. In December, bullion capped the biggest quarterly rise since March 2017. After that rally, its 14-day relative strength index is well above 70, a level that can indicate a pullback to some investors.

“Mostly people are moving toward safe-haven assets, such as gold, because of the volatility in the equity markets,” Gnanasekar Thiagarajan, director at Commtrendz Risk Management Services, told Bloomberg. The U.S. government shutdown “will only further create more uncertainty, so that will be supportive,” he said.

Gold surged in the final quarter of 2018 as investors positioned themselves for a global slowdown, with fewer rate hikes expected from the U.S. Federal Reserve, and as a steep sell-off in the global equities spurred demand for havens. Worldwide holdings in gold-backed exchange-traded funds have jumped.

“Gold is building towards a crescendo” in the first quarter, said Eily Ong, a metals and mining analyst at Bloomberg Intelligence.

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Markets
Gold has been proving to be just the kind of hedge against market chaos that some investors hope for when they buy it.
barrons, gold 2019, glitter
324
2019-04-02
Wednesday, 02 January 2019 09:04 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved