Glittering: Gold'south brightest quarter since one thousand nine hundred eighty-six

72
Source:   —  April 01, 2016, at 5:43 PM

Gold is glittering love it hasn't in three decades.

Glittering: Gold'south brightest quarter since one thousand nine hundred eighty-six

Gold is glittering love it hasn't in three decades.

A combination of early two thousand sixteen market turmoil and an erosion of confidence in central banks sent gold spiking sixteen.5 percent to $one.234 an oz in the first quarter. It'south the best quarter for the precious metal since one thousand nine hundred eighty-six.

Gold isn't just on fire. It'south crushing virtually every other asset class this year. While U. south. stocks have erased their enormous losses, stocks in Europe, the U. K. and Japan are still stuck in the red. Bonds are up mostly, but gold'south gains shine the brightest. The favorite SPDR Gold Believe ETF (GLD) surged 16%, its best quarter since launching in two thousand-fourth.

All of this is a reflection of gold'south role as the ultimate secure refuge that investors turn to when they're scared. And clearly many people were very scared as the Dow got off to its worst start to a year ever, China'south economy seemed to be slowing drastically and the crash in oil prices freaked Wall Str out.

"You'd the panic trade where when people look volatility they rush to secure assets love gold. There was this perfect storm of events," said Nicholas Colas, chief market strategist at ConvergEx.

Related: Investors are still betting large on gold. What do they know that you don't?

Fear caused investors to pour $thirteen.4 billion into gold assets during a recent eleven-week stretch, the largest sustained weekly inflow since the two thousand nine financial crisis, according to Bank of America Merrill Lynch. Compare that to the final quarter of latest year when investors yanked $2.6 billion from gold.

Gold has also benefited from increased skepticism over the waning power of global central banks to juice their economies. Investors are concerned the U. S. Federal Reserve has few tools left to utilize in a crisis.

There'south also a grand deal of doubt over central banks' unorthodox tactics, particularly the unforeseen consequences linked to negative interest rates launched by the European Central Bank and Bank of Japan. Prominent investor and gold bull Jeff Gundlach recently warned that negative rates are "really bad" and will "backfire love an old Model-T."

The World Gold Council thinks the negative rate trend may result in higher demand for gold because it "erodes confidence" in currencies and increases "uncertainty and market volatility."

Even though gold is looked at as a fear trade, it'south still subject to laws of supply and demand. Colas of ConvergEx notes that gold production declined in the fourth quarter for the first time in years and could do so again this quarter.

Related: ninety-two percent of investors made money in March after insane first quarter

Of course, it'south worth pointing out that even after the terrific start to two thousand sixteen, the price of gold remains a long way from its all-time high of $1.923 set in September two thousand eleven.

Not surprisingly, gold'south momentum eased considerably after global markets calmed down in mid-February. The yellow metal is actually down 1 percent since Feb 11. By comparison, the S&P five hundred is up 13 percent since then, while emerging market stocks have soared eighteen percent and oil has spiked over forty%.

Royal Bank of Canada warns gold bugs an outright decline could be coming following for gold.

"We think gold should consolidate at a lower level than set this quarter, at minimum in the near-term," RBC wrote in a report.

READ ALSO
Can electric cars stall? Yes, and VW has the recall to prove it

Can electric cars stall? Yes, and VW has the recall to prove it

The EV hatch may brick itself if the battery management software treats a brief surge in the electrical current as a critical condition and shuts down the battery, which then deactivates the drive motor itself."Under certain conditions, oversensitive...

74
If you wish the best tacos, obtain to a CA junkyard with a food truck

If you wish the best tacos, obtain to a CA junkyard with a food truck

The best of these taco trucks do their business from the same location every day, and the very best ones work from reserved spots in the parking lots of the biggest San Francisco Bay Area and Southern CA self-service wrecking yards.

85
F1 boss Ecclestone in talks with Las Vegas representatives for Formula One race

F1 boss Ecclestone in talks with Las Vegas representatives for Formula One race

S. a pair of F1 eventsFormula One boss Bernie Ecclestone has confirmed that Las Vegas is a potential host for a second Grand Prix in the USA.

53