Global Markets Lost Their Luster in 2016: Gold and Silver Shine


Jan. 22 2016, Updated 5:06 a.m. ET

Markets slammed, gold strengthens

Global markets entered 2016 weak-kneed, but gold and silver shined. Gold has risen 2.9% and silver has risen 0.78% since the start of the year. Platinum and palladium fell 7% and 13.3%, respectively. The S&p 500 has fallen almost 8%, and crude oil has fallen a whopping 20.6% since the beginning of 2016. Volatility of the markets rose to almost 27% from 18% at the end of 2015.

Gold and silver are ranked second and fourth, respectively, on the S&P GSCI (Goldman Sachs Commodity Index), which tracks 24 commodities including gold, silver, crude oil, Brent oil, wheat, and copper. The graph below shows the historical performance of gold, depicted by the SPDR Gold Shares (GLD) against the S&P GSCI.

[marketrealist-chart id=978243]

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Risk aversion sparked

Although the index-based ETF tracking the commodities market fell, gold has buoyed these losses and emerged as a winner. GLD rose 2.6%  and the iShares Gold Trust (IAU) rose 2.7% so far in 2016.

Gold-mining stocks gave a mixed performance. They outperformed most stocks in the current stock market turmoil. Shares for Barrick Gold (ABX), AngloGold Ashanti (AU), and Agnico Eagle Mines (AEM) rose 3.3%, 3.2%, and 2.7%, respectively, during the past trading month. Most miners have seen losses during the same time frame. Even if gold performed comparatively well, the mining sector is still facing hard times recovering from bottomed-out prices.


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