Gold Outperforms Most Asset Classes as Price Continues to Rise
August 03, 16(IDEX Online News) – The gold price breached $1,360/oz for the second time in 2016 – a 29-percent increase in US dollar terms – as the metal continues to cause analysts to increase their price forecasts, according to the latest report from the World Gold Council.
The latest rise, which has extended gold’s largest continuous gain since the European sovereign debt crisis in 2010 and 2011, was precipitated by a recent weak Japanese bond auction, which unnerved the markets.
Gold has consistently been one of the best performing assets since the start of 2016, outpacing all major benchmark indices and with comparable volatility to stocks. It has also outperformed commodities such as crude oil, whose prices have plunged since the end of June.
Investors may also be losing confidence in government securities, amid rising uncertainty in global financial markets following Brexit and the recent slowdown in emerging market economies.
The report said that, Gold analysts have increased their forecasts. UBS now expects $1,400/oz for the end of the year, while Credit Suisse and BOAML have it even higher at $1,500/oz over the next 6 months.