Gold rally just starting according to UBS & Credit Suisse
Samuel Gee, News Editor
13 Jul 2016, 11:44 a.m.
Following three difficult years for the yellow metal the first six months of 2016 have seen gold surge 28%, its best first half return since 1974.
According to analysts from Credit Suisse and UBS the rally has only just begun. In the short term analysts from both banks are expecting the price to reach $1,400 per ounce. The surge is being spurred on by economic uncertainty, loose monetary policy and anaemic yields on government and corporate paper.
Following the UK’s decision to exit the EU institutional money has flooded into government debt, pushing yields to all-time lows. For the first time in history the entire stock of Swiss debt has a negative yield.
In total around $10 trillion worth of sovereign debt is now trading below zero which according to the king of bonds, Bill Gross, is resulting in negative GDP growth across the global.
Negative yields are boosting golds appeal. Since June 23rd when the UK voted to leave the EU gold has jumped 8%. Despite yesterday’s fall gold is currently trading at £1,008.39 per ounce.