Thursday, May 10, 2018

Into the end of last week, gold is still producing higher gains than the S&P 500 despite the severe fall in demand

Earlier this week we published an article on how global demand for gold had fallen off a cliff in the first quarter of 2018, but despite this negative sentiment for the precious metal, as of last Friday gold prices had still churned out a higher return for the year than the S&P 500.

Chart courtesy of Business Insider
Gold was up half a percent year-to-date through last Friday. This doesn't sound very exciting, but over the same period, the S&P 500 Index was in the red—the first time in nearly a decade that stocks have been negative for the year through the beginning of May. The yellow metal is doing the one thing for which many investors have it in their portfolio—namely, it's trading inversely to the market. This highlights its longstanding role as an attractive diversifier and store of value.Business Insider
Now this comparison between gold and stocks changed a bit between Monday and Wednesday as the equity markets followed through with four straight days of gains at the same time gold remained stagnant in a range of between $1305 and $1315.  However here on May 10, economic news has once again helped drive up the price of gold back to just under $1320, and solidifies the trend that gold prices are outperforming most stocks here in 2018.

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