person panning for gold

Our Weekly Podcast and Market Overview from Quilter Cheviot

CAN INVESTORS LIKE BOTH GOLD AND SHARES?

By Alan McIntosh, Chief Investment Strategist

“Stock markets enjoyed another strong week, despite the US failing to agree a rollover of the aid package for millions currently out of work. It was also notable as a week when the US Nasdaq Index closed above 11,000 for the first time ever and gold closed above $2,000 per ounce, a new all-time high. How is it that an index full of high performance technology companies (very risk on) can reach new levels at the same time as an asset that is seen as a safe haven in times of crisis (very risk off)? Both are up by over 20% since the start of the year.

There is a technical reason to support this and some practical ones as well. Bond yields are close to zero in the US and negative out to longer maturities in a number of other countries, Gold earns no interest, so the opportunity cost of holding gold in terms of lost income is now very low. Therefore one of the traditional reasons for not owning it i.e. it earns no income, ceases to have the same resonance… read more…

Weekly podcast: Markets Uncut

“Join Sebastian Scott and Richard Carter as they take a look at recent market and economic developments, including the latest unemployment numbers from the US and gold hitting new all-time highs…”