Gold returns so far this year are posting their third-best performance since 1980 and are actually just one rounding error away from the all-time best performance over the past 44 years.
Just one rounding error away from the best performance of all time
“While we can argue that fund FOMO is difficult to account for, there is evidence of notable OTC interest in physical markets being recorded with BOE Gold simultaneously trading in a tight range. Since the Fed kicked off its easing cycle with a 50bp cut, commodity prices, inflation swaps and US long-term yields have all risen in tandem, and even outpaced the rally in risk assets by some measures.”
“The cross section of commodity prices continues to signal a significant improvement in demand expectations, and while survey-based measures of consumer confidence are deteriorating, consumer spending patterns have remained strong. While this could easily be seen as an overreaction to the start of the Fed’s 50bp tapering cycle, a persistence in this trend could signal more worrying signs that it may not be as easy as the Fed hopes to lower rates without reflation.”
“Conversely, if these trends simply reflect an overreaction to the start of the easing cycle, then it is worth noting that in the years following such a remarkable performance by Gold, declines for the following year have averaged -27%.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
