Gold is up over 12% in the first five weeks of 2016, while stocks are down 9% in the same time, giving gold a 21% advantage over stocks.  Gold opened on Monday morning (February 8) by touching its $1200 price from the start of 2015, thereby making up for all the losses from last year. 

Gold is up over 12% in the first five weeks of 2016, while stocks are down 9% in the same time, giving gold a 21% advantage over stocks.  Gold opened on Monday morning (February 8) by touching its $1200 price from the start of 2015, thereby making up for all the losses from last year. 

Gold rose again last week to close January at $1,118 per ounce, up 5.3% in January.  Meanwhile, the Dow Jones and S&P stock indexes were each down over 5%, averaging a 5.3% loss. Therefore, gold has earned a 10.6% advantage over stocks so far in 2016.  One of the main reasons for gold’s advantage is the surprising decline in many global interest rates.  When the Fed raised rates in December, investors had assumed they would keep raising rates and then other countries might follow.  Instead, Japan surprisingly reduced its key short-term rate to -0.1% from +0.1%.  Now there are five major central banks that impose negative interest rates on overnight bank money: The European Central Bank (ECB), the Bank of Japan and central banks in Switzerland, Denmark and Sweden.  Last Friday, former Federal Reserve Chairman Ben Bernanke told MarketWatch that the U.S. Federal Reserve ought to consider negative rates as well.  With so many key currencies earning less than zero, gold enjoys a very real advantage over paper money.

Gold rose again last week to close January at $1,118 per ounce, up 5.3% in January.  Meanwhile, the Dow Jones and S&P stock indexes were each down over 5%, averaging a 5.3% loss. Therefore, gold has earned a 10.6% advantage over stocks so far in 2016.  One of the main reasons for gold’s advantage is the surprising decline in many global interest rates.  When the Fed raised rates in December, investors had assumed they would keep raising rates and then other countries might follow.  Instead, Japan surprisingly reduced its key short-term rate to -0.1% from +0.1%.  Now there are five major central banks that impose negative interest rates on overnight bank money: The European Central Bank (ECB), the Bank of Japan and central banks in Switzerland, Denmark and Sweden.  Last Friday, former Federal Reserve Chairman Ben Bernanke told MarketWatch that the U.S. Federal Reserve ought to consider negative rates as well.  With so many key currencies earning less than zero, gold enjoys a very real advantage over paper money.

Gold rose another $10 last week and silver rose above $14 again.  On Monday morning, January 25, the London gold price fix came in at $1103.70, the first closing above $1100 since $1106 on November 6 (i.e., $1106 on 11-06).  Monday’s New York opening surpassed that number at $1108, the highest reading in nearly three months. The Dow Jones stock index is down 7.6% so far in 2016, so gold retains a double-digit advantage over stocks (+4.3% vs. -8.1% = a 12.4% gold advantage).  The stock market’s “January Barometer” says that “so goes January, so goes the year, so this might be the year of falling stocks and rising gold, too.

Gold is holding on to most of its early-2016 gains while the stock market has fallen sharply.  Gold is up 2.5% so far in 2016 while the Dow Jones index is down 8.3% and some of the more volatile stock market indexes are down 10% to 12%.  China’s Shanghai index is down over 20% since late December.   Part of gold’s strength comes from the weakness of the U.S. economy and the threat of deflation. 

Gold is holding on to most of its early-2016 gains while the stock market has fallen sharply.  Gold is up 2.5% so far in 2016 while the Dow Jones index is down 8.3% and some of the more volatile stock market indexes are down 10% to 12%.  China’s Shanghai index is down over 20% since late December.   Part of gold’s strength comes from the weakness of the U.S. economy and the threat of deflation. 

Gold is holding on to most of its early-2016 gains while the stock market has fallen sharply.  Gold is up 2.5% so far in 2016 while the Dow Jones index is down 8.3% and some of the more volatile stock market indexes are down 10% to 12%.  China’s Shanghai index is down over 20% since late December.   Part of gold’s strength comes from the weakness of the U.S. economy and the threat of deflation. 

Gold is holding on to most of its early-2016 gains while the stock market has fallen sharply.  Gold is up 2.5% so far in 2016 while the Dow Jones index is down 8.3% and some of the more volatile stock market indexes are down 10% to 12%.  China’s Shanghai index is down over 20% since late December.   Part of gold’s strength comes from the weakness of the U.S. economy and the threat of deflation. 

Gold is holding on to most of its early-2016 gains while the stock market has fallen sharply.  Gold is up 2.5% so far in 2016 while the Dow Jones index is down 8.3% and some of the more volatile stock market indexes are down 10% to 12%.  China’s Shanghai index is down over 20% since late December.   Part of gold’s strength comes from the weakness of the U.S. economy and the threat of deflation.