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Is the Gold Bull Over? Why Silver, Plantinum and Palladium might be better bets
Gold bugs must feel like investment road-kill after the precious metal’s brutal sell-off this month. Gold bullion had its biggest two-day fall in 30 years, amid talk of weakening jewellery demand from India and China, and potential forced sales of gold from troubled European countries.
Australian gold stocks tumbled. Led by sharp falls in Newcrest Mining, the S&P / ASX Ordinaries Gold index has slumped 42 per cent over one year, and on a total return basis (including dividend reinvestment) has underperformed the ASX 200 by about 64 per cent.
So much for gold being a supposed investment safe-haven as central banks worldwide print more money through their quantitative easing programs and stoke expectations of higher inflation in the next few years. With global economic risks still elevated, gold should be doing better.
Contrarians might see gold’s sell-off as a once-in-a-decade buying opportunity. A chorus of commentators believe gold is heading higher in the long run, as central banks are forced to maintain their quantitative easing programs for longer than expected.
