Gold Adds Element of Stability to Tumultuous Times

December 25, 2018 James Heinsman In the News

Money managers see chaos looming in the international markets, making them buy gold more than have been in at least six months. Prospects of global growth seem dim, bringing equities down and making investors nervous. This is at least part of the reason why investors have purchased about $1.25 billion worth of precious metals via ETFs during December. Interest in gold futures is also rising.

Gold Great for Uncertain Times

During the past month gold prices grew by more than 2%, the largest one-month growth since August 2017. Investors ran to gold when news from Washington DC grew chaotic, inspiring further stock market declines. Slower global growth also whittled away at investors confidence after the Federal Reserve raised US interest rates on December 19, causing the value of the dollar to dip.

“The market is questioning whether the Fed is making a policy mistake, and that could lead not only to slower growth, but perhaps to a recession,” said Quincy Krosby, the chief market strategist at Prudential Financial Inc. For equities, when you see this “heavy selling, it’s indicative of fear, and gold becomes a safe-haven allocation.”

ETFs, Federal Reserve, Gold, Quincy Krosby,

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