◆ Gold has surged 7.5% this week to $1,690/oz and is set for its biggest weekly gain since October 2011. It has reached a new seven year high today as fears mount over the negative effect of the coronavirus on companies, economies, markets and currencies.
◆ Gold is the top performing asset this week (see table above) and so far in 2020 as investors become risk averse and diversify into safe haven gold. Gold is 10% higher year to date in 2020, while the S&P 500 is down 6.2% (see table below).
◆ Central banks globally including the ECB look set to follow the Federal Reserve’s emergency 50 basis point interest rate cut on Tuesday. U.S. bonds have fallen to record lows near 0% which is making non negative yielding gold very attractive to investors.
◆ Weakness in the dollar and massive volatility and sharp falls in stocks globally is highlighting gold’s value as a hedge in portfolios.
◆ Allocations to gold remain low with most investors not having any allocation to gold whatsoever yet. This will change in the coming weeks as investors diversify into gold and retail and institutional investors who already have an allocation to gold, increase their allocations.
NEWS & COMMENTARY
Gold set for biggest weekly gain since Oct 2011 as fears mount over virus impact
Gold prices end at highest in over a week as coronavirus spread fuels safe-haven buying
Europe tumbles again as travel stocks pummeled
World stocks succumb to virus as cases spread, disruptions grow
Gold will go to record high, Gundlach
‘Bond King’ Gundlach says Fed panicked and short-term rates are ‘headed toward zero’
“R.I.P. Good Times” –Sequoia Capital
Coronavirus is the ideal excuse for governments to blow the budge
GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)
05-Mar-20 1647.45 1659.60, 1274.47 1284.70 & 1474.63 1482.69
04-Mar-20 1644.80 1641.85, 1286.73 1281.63 & 1475.06 1477.83
03-Mar-20 1599.05 1615.50, 1249.98 1260.25 & 1438.03 1446.03
02-Mar-20 1609.70 1599.65, 1258.79 1251.41 & 1451.47 1437.29
28-Feb-20 1626.35 1609.85, 1262.37 1254.88 & 1474.61 1468.18
27-Feb-20 1646.60 1652.00, 1278.58 1282.45 & 1505.32 1504.97
26-Feb-20 1647.95 1634.90, 1273.37 1264.76 & 1515.45 1505.42
25-Feb-20 1655.90 1650.30, 1275.54 1271.39 & 1528.06 1522.73
24-Feb-20 1682.35 1671.65, 1304.49 1293.69 & 1555.84 1540.26
21-Feb-20 1633.70 1643.30, 1264.81 1269.12 & 1512.48 1515.29
