Gold has been taking a pummeling. Between 2011 and 2015, both gold and gold stocks have suffered in one of the worst bear markets ever (as measured by peak-to-trough performance in percentage terms).
Taken in isolation, the many risks around the world to both economic development and growth might not have a global impact. However, as these generally dispersed risks multiply and/or become more closely linked – either in reality or in people’s perceptions – financial stability can become increasingly threatened. Among these risks are escalating geopolitical turmoil in the Middle East, recurring issues with European sovereign debt, currency issues and slowing growth in China, Russian aggression, and economies in Japan and the U.S. that fail to reach their potential.
For 2016 and beyond, gold may, once again, find itself acting as a financial hedge against risk and a place of safety in times of uncertainty.
Gold Price (USD)
Source: Bloomberg
About the Authors:
Imaru Casanova holds an appointment as senior gold analyst at VanEck. Mrs. Casanova is a proven expert on gold and gold mining and has been quoted, inter alia, in Barron's, USA Today, Investor's Business Daily and has appeared on CNBC.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.