Excerpt from my latest posting on sharpspixley.com entitled: All change in gold sentiment, but can it persist.
Back in December gold had few, if any, friends among the mainstream analysts. The US Federal Reserve was going to start raising rates and all the experts knew that so doing would lead to a rise in the value of the US dollar and a consequent fall in the gold price. Apart from the usual suspects, gold had virtually no supporters. But three weeks after the Fed did indeed start to raise interest rates, the whole sector began to turn completely around. General equities fell and gold started to rise, while the dollar rose, then stuttered backwards. So much for expert opinions.
Gold’s performance has been little short of spectacular so far this year, with an increase to date of around 18% in just over 2 months. Equities have made something of a recovery in the past few days, but as a guide the S&P 500 is down a couple of percent year to date. In Europe the UK’s FTSE 100 is flat, Germany’s DAX is down 4% and in Asia Japan’s Nikkei 225 has fallen nearly 8% while China’s SSE Composite is down almost 13%.
Gold thrives on uncertainty and in the US and Europe there are some huge political uncertainties out there……….
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