After a very volatile year, Gold gained more than 8%
in 2016. The 1st half of the year was driven by fears of a worldwide
recession and uncertainties around the BREXIT vote, with Gold prices
consequently increasing by more than 23% to reach $1,380 an ounce.
In the 2nd half of the year, worldwide
risks seemed to have diminished, so Gold prices declined. As the American
Dollar rallied at the end of 2016 in the face of increasing interest rates and
Trump’s proposed economic policies, Gold went automatically down due of the
negative correlation existing between the 2 assets.
Gold is a safe-haven asset, which investors seek in
times of global worry, as it’s considered as a hedge against uncertainty. We
already know how risky 2017 could be, which could lead to an increasing demand
for the precious metal.
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