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Investors See Safety in Gold

Gold holds onto value as most other commodities sink.

Written by Keith Kohl
Posted January 25, 2016 at 2:18PM

Futures are looking up again for gold, and this time on more than the word of Donald Trump.

Nearly every other commodity on the market today has been seeing losses, driving costs and investments into the dirt.

2015 brought bad news on a global scale, including the oil price rout, the Greek bailout, and the ongoing decline of the Chinese economy.

And since May last year, the equity markets have lost around $15 trillion, leaving investors at a loss for good news…

Gold, however, is seeing its own kind of rally, partially because everything else is doing so poorly.

You see, it’s this kind of market volatility that’s making gold bullion a sort of safe haven for worried investors. Gold has value that isn’t going away any time soon, and is thus all the more attractive as one of the few things that can hold its own right now.

Gold StackInvestors have put an extra $3 billion into gold ETP’s just this year—all the more impressive since we’re
still in the first month of 2016.

Similarly, ETF’s backed by precious metals saw as much as $926 million invested just this year. Worldwide ETF holdings grew to more than 1,500 metric tons.

Gold futures rose 4.2% this month, rising to $1,105 per ounce, and long-term futures and options contracts added more than 1,000 positions as of January 19.

“What’s out of fashion may be coming back,” says head of gold investments for State Street Global Advisors George Milling-Stanley. “Gold is a very risk-off trade…”

There’s no doubt now that gold is capturing investors’ attention again, and will continue to do so for as long as this round of economic routs lasts.

Bearish views on China’s growth coupled with ongoing unrest in the Middle East are going to keep several markets scrambling for a foothold. The trend of currency devaluations may work to hold commodity values down as well.

It’ll be a rough time for many investors, whose portfolios are being hurt left and right. But gold, among a few other choice metals, will always offer a buffer. And now, while the price is on the rise, is the time to take advantage of it.

To continue reading about gold’s new year rally, click here to read the Bloomberg Business article.

Until next time,

Keith Kohl Signature

Keith Kohl

follow basic@KeithKohl1 on Twitter

A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.

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