Gold is doing something we have not seen for 5 years
The last more than two months have been a kind of wake-up call for investors. After a particularly uneventful year in 2017, when the stock market climbed sharply without significant downward movement, Wall Street and investors were surprised by the rapid corrections in February and March.
As you might expect, not too many industries have escaped the sudden decline in equities. The fast-growing technology sector is volatile, the social media giant Facebook is involved in a privacy scandal. Meanwhile, most US multinational companies have been struggling since US President Trump’s announcement of punitive tariffs on steel and aluminum.
We have not experienced anything like that for five years
But an asset has not fallen in step with the stock market: gold. The shiny yellow metal has improved by 2.4% by April 12th. By comparison, the Dow and S & P 500 have fallen 1.4% and 1.8% since the beginning of the year and more than 10% since reaching their historical highs on January 26th.
Strong first quarters have been common for gold in recent years. In 2016, Gold even achieved the best performance in three decades. But it is not the nominal rise in the price of gold in the first quarter of 2018 that is so impressive. It’s what the precious metal has been doing from a trading perspective since the beginning of the year.
