Bringing you live news and features since 2006 

Gold continues to rise

RELATED TOPICS​

Joe Foster, Van Eck’s gold strategist, reports that the gold price has taken off over April. He writes that the month saw the gold market move from a position of strength to one of even greater strength. 

The gold price never traded below USD1,200 an ounce in March but late in April, the price reached its 2016 high of USD1,296 per ounce, ending the month at USD1,292.99, registering a gain of USD60.28 or 4.9 per cent.
 
May 2 saw even stronger news with gold reaching USD1,300 per ounce, for the first time since January 2015.
 
Foster writes: “We believe that an increasing sense of financial risk and US dollar weakness are driving investment demand for gold. When commenting on the global economy in a Bloomberg interview on April 5, International Monetary Fund (IMF) President Lagarde indicated that downside risks have increased and ‘we don’t see much by way of upside’.”
 
Foster lists reasons for the rise in the price of gold as:
 
• Positive changes in sentiment and investment demand for gold.
 
• Companies have successfully slashed costs, cut debt, gained
efficiencies, and generated cash.
 
• Mean reversion in a sector that had been oversold during the worst
bear market in history.
 
• Elimination of short selling pressure that had been weighing on
gold and gold stocks since they crashed in 2013.
 
• Limited liquidity in a relatively small sector with a global market cap
of just USD260 billion.
 
Foster concludes: “The investment demand evidenced by the strong inflows into the bullion ETPs this year suggests that many investors are making a strategic investment in gold to diversify and prepare their portfolios for the uncertainty of a financial system that may become increasingly dysfunctional.”
 
You can read his report in full here

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
ETFs
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by